1TLUNOIS}  SENATE.  J  12th  ASSEM. 

LBQI8'  *  I  3d   SESSION. 

FEBRUARY  3,  184L 

Read  and  laid  on  the  table. 


LETTER 

V 

FROM 

THE   GOVERNOR, 

^ENCLOSING  A  COMMUNICATION  FROM  RICHARD  M.  YOUNG,  AS  AGENT  OF  THE 

STATE  OF  ILLINOIS,  FOR  NEGOTIATING  LOANS  FOR  THE  ILLINOIS 

AND  MICHIGAN  CANAL. 


EXECUTIVE  DEPARTMENT, 

Springfield,  Feb.  3, 1841. 
To  the  Honorable, 

The  SPEAKER  of  the  Senate. 

SIR  :  In  compliance  with  a  resolution  of  the  Senate,  I  have  the  honor 
herewith  to  enclose  a  report  of  the  Hon.  R.  M.  Young,  Agent  of  the 
State  of  Illinois,  for  negotiating  loans  for  the  benefit  of  the  Illinois  and 
Michigan  Canal. 

I  have  the  honor  to  be,  sir, 

Your  obedient  servant, 

THO.  CARLIN. 


REPORT. 

WASHINGTON  CITY,  Jan.  10, 1841. 
His  Excellency,  THOMAS  CARLIN, 

Governor  of  Illinois. 

SIR:  Yours  of  December  12,  1840,  communicating  certain  resolutions 
of  inquiry,  adopted  by  the  House  of  Representatives  of  the  State  of  Illi- 
nois, at  its  present  session,  and  instructing  me  to  pay  the  semi-annual 
interest  which  became  due  on  our  canal  Bonds  at  New  York  on  the  first 
Monday  in  this  month,  has  been  received ;  in  reply  to  which  I  have  the 
honor  to  submit  the  following  statement: 

That,  by  the  contract  made  with  Messrs.  John  Wright  &  Co.  in  Lon- 


[350]  2 

L 

don,  on  the  30th  day  of  October,  1839,  by  which  they  undertook  to  dis* 
pose  of  £225,000  or  $1,000,000,  of  the  stock  of  the  "Illinois  and  Michi- 
gan Canal,'1  at  the  rate  of  £91  to  the  £100,  free  from  all  charges  and 
commissions,  it  was  stipulated,  among  other  things,  that  £30,000  should 
be  advanced  to  the  State;  £10.000  of  which  was  to  be  payable  on  the 
15th  of  January,  1840,  and  £20,000  on  the  15th  of  July  following.  Besides 
these  sums,  £300  was  paid  by  Messrs.  Wright  &  Co.  at  the  time  of  clos- 
ing the  agreement,  and  the  delivery  of  the  bonds,  which  was  charged  to 
the  State,  and,  also,  taken  into  the  account  of  advances:  making,  in  thr 
whole,  the  sum  of  £30,300  sterling.  On  my  arrival  in  London,  I  had 
deposited  all  the  money  I  had  with  me,  for  the  purpose  of  paying  ex- 
penses, with  Samuel  Jaudon,  Esq.  agent  of  the  Bank  of  the  United  States, 
and  drew  upon  him  for  small  sums  as  I  had  occasion  to  use  them.  These 
£30  / 1  also  deposited;  and  after  settlement  with  him  at  the  time  of  leav- 
ing London  for  the  United  Stales,  and  the  proper  allowance  made  for  the 
amount  of  checks  drawn  upon  him,  I  took  a  draft  for  the  residue  oa  the 
Bank  of  the  United  States  at  New  York.  I  at  the  same  time  made  an 
agreement  with  him,  as  agent  of  the  Bank  of  the  United  States,  for  the 
£10,000  payable  the  15th  of  January,  for  which  I  was  to  receive,  on  my 
arrival,  par  funds  in  Philadelphia,  with  the  difference  of  exchange  between 
New  York  and  London,  which  was  reckoned  at  9  per  cent.,  and  which 
together,  would  have  been  equal  to  the  sum  of  $48,500  in  specie.  I  ac- 
cordingly  drew  an  order  on  Messrs.Wright&  Co.  in  favor  of  Mr.  Jaudon, 
for  the  amount;  but  the  order  not  being  negotiable,  according  to  the  cus- 
tom of  the  bankers  in  London,  and,  consequently,  unavailable  until  the 
actual  day  of  payment,  I  deferred,  at  his  request,  the  drawing  of  a  regular 
bill  of  exchange  until  my  arrival  at  Philadelphia.  (See  Mr.  Jaudbn's  let 
ter,  No.  1,  in  the  appendix.)  At  this  time  neither  myself  nor  Mr.  Jaudon 
knew  of  the  suspension  of  specie  payment  by  the  Bank  of  the  United 
States;  nor  did  I  learn  that  such  was  the  'case  until  my  arrival  at  New 
York:  it  being  the  understanding  that  I  was  to  receive  funds  equal  in 
value  to  specie.  On  reaching  Philadelphia,  about  the  29th  of  November.. 
1839, 1  found  the  Bank  in  a  state  of  suspension,  and  its  notes  at  a  depre- 
ciation of  nine  percent.  On  the  next  day  Ihad  an  interview  with  the 
president  and  cashier,  and,  after  an  explanation  of  the  understanding  be- 
tween Mr.  Jaudon  and  myself,  they  did  not  hesitate  to  allow  nine  per  cent, 
as  the  difference  in  exchange  between  New  York  and  London,  and  a  dis- 
count of  nine  per  cent,  as  the  proper  scale  of  depreciation  upon  their 
notes,  in  which  payment  was  made.  The  draft  on  Messrs.  Wright  &  Co. 
was  dated  the  30th  November,  1839;  and  from  that  time  the  avails  of 
the  £  10,00  >  may  be  considered  as  having  been  under  my  control,  although 
the  draft  was  not  payable  in  London  until  the  15th  of  January,  1840. 
(See  my  letter  to  Messrs.  Wright  &  Co.  No.  2,  and  their  reply  to  the 
same,  No.  3.) 

The  reason  why  this  money  was  placed  in  deposite  to  my  own  credit, 
and  not  to  the  credit  of  the  State,  is,  that  <he  contract  was  in  its  nature 
conditional,  requiring  legislative  action,  and  your  approval  as  Governor; 
and  that  I  did  not  consider  it  just  towards  Messrs.  Wright  &  Co.  to  make 
any  application  of  the  funds  for  State  purposes,  until  it  was  known  that 
the  contract  would  bit  recognized  and  carried  out  in  good  faith  011  our 
part,  and  some  special  instruction  was  received  from  you  on  the  subject* 


3  [351] 

The  propriety  of  this  course  will  be  seen  by  reference  to  the  action  of  our 
Legislature,  which  convened  soon  after,  and  the  subsequent   correspon- 
dence which  took  place  in  regard  to  it,  to  be  found  in  the  appendix, 
bein"  at  the  time  of  thisdeposite  a  want  of  public  confidence  in  the  Bank 
of  the  United  States,  and  supposing  that    these  funds,  in  the  event  of 
the  approval  of  the  contract  with  Messrs.  Wright  &  Co.  (which,  under  the 
then  existing  circumstances,  I  confidently  anticipated,)  would  be  wanted 
for  disbursement  on  the  line  of  the  canal  at  home;  and  believing  that 
some  advantage  would  accrue  to  the  State  by  converting  them  into  such 
western  funds  as  were  current  in  Illinois,  and  generally  received  at  par 
in  all  business  transactions,  by  reason  of  a  difference  of  exchange  varying 
from  one  and  a  half  to  two  and  a  half  per  cent,  in  favor  of  the  notes  of  the 
United  States  Bank,  I  proceeded,  as  fast  as  was  practicable,  and  had  suc- 
ceeded in  converting  the  greater  portion  of  the  amount  into  notes  and 
certificates  of  deposite  on  the  banks  of  Illinois  and  Indiana,  when  1  re- 
ceived your  letter  of  February  3, 1840,  informing  me  that  the  Legislature 
had  adjourned  on  that  day;  that  a  resolution  had    passed  the  House  of 
Representatives,  requiring  the  Secretary  of  State  to  transmit  the  same 
to  Messrs  Wright  &  Co.  in  London,  declaring  that  no  law  existed  in  Illi- 
nois authorizing  the  sale  of  bonds  at  £91  to  the  £100,  and  requesting  a 
return  of  the  bonds,  &c.:  but  that  il  had  been  defeated  in  the  Senate; 
and  that,  in  consequence  of  the  Legislature  having  declined  to  approbate 
the  arrangement  made  by  me  in  London,  you  did  not  feel  at  liberty  to 
confirm  it:  and  that  you  were  not  then  prepared  to  say  how  the  business' 
could  be  adjusted  in  relation  to  the  £10,000,  &c.  but  would  write  to  me 
again  on  your  return  to.Quincy.     (See  extracts  from  your  letter,  No.  b.) 
According  to  your  promise,  you  wrote  to  me  from  Qumcy  on  the  1  Jtb 
of  February,  1840,  and  advised,  as  the  better  course,  the  cancelling  of  the 
contract  with  Messrs.  Wright  &  Co.  for  reasons  mentioned  in  your  letter, 
to  which  I  heg  leave  to  refer,  as  there  is  no  necessity  for  comment,  (bee 

letter  No.  7.) 

In  the  mean  time,  some  person  had  sent  to  Messrs.  Wright  <fc  Oo.  a 
copy  of  the  resolution  referre;]  to,  although  it  was  not  authorized  by  the 
concurrent  vote  of  the  Senate;  which  at  once  put  a  stop  to  their  opera- 
tions in  London,  and  prevented  them  from  carrying  out  some  advantage- 
ous arrangements  which  had  been  made  for  regular  sales  of  our  bonds  in 
that  market.  (See  his  letter,  No.  4,  and  Mr.  Jaudon's,  No.  5.) 

I  also  refer  10  the  letter  of  Mr.  Jaudon  to  show  that,  shortly  after 
made  this  contract  for  £91  to  the  £100,  our  bonds  were  selling  for  a  much 
less  price  in  the  market;  and  that  he  had  purchased  to  the  amount  oi 
$50,000,  for  a  house  on  the  continent,  of  Illinois  six  per  cent,  dollar  bonds 
payable  in  1860  and  1870,  at  from  78  to  87*  cents  on  the  dollar;  that,  ac- 
cording t.o   this  estimate,  our  sterling  six  per  cents,    would  have  been 
worth  but  from  88  to  8Si  pounds  sterling  in  the  hundred;  that  the  i 
made  under  our  contract  were  considerably  above  the  current  market 
price;  and  that  we  deserved  great  credit  "for   having  sold  the  bonds  so 

well,  &.c. 

As  soon  as  your  letters  of  the  3d  and  19th  of  February  were  received, 
I  saw  the  necessity  of  converting  all  the  funds  I  had,  of  every  descrip- 
tion, into  such  as  were  at  specie  par  in  New  York,  for  the  purpose  of  re- 
funding the  amount  advanced  by  Messrs.  Wright  &  Co.  as  soon  as  prac- 


[352] 


ticable,  ifinthe  mean  time  you  should  not  perceive  sufficient  reasons  for 
changing  your  opinion  as  to  the  propriety  of  approving  the  contract.  Illi- 
nois and  Indiana  bank  notes  and  certificates  of  deposite  were  at  this  pe- 
riod fluctuating  at  a  discount  of  from  8  to  11  per  cent,  in  New  York  and 
Philadelphia,  where  I  effected  most  of  the  exchanges;  that  is,  the  brokers 
would  purchase  at  from  9  to  11  discount,  and  sell  at  8  to  84;  so  fhat,  with 
few  exceptions,  I  lost  as  much  as  I  had  gained  by  the  original  exchanges; 
and,  taking  it  altogether,  including  necessary  expenses,  saved  but  little,  if 
any,  excess. 

A  short  time  after  I  received  yours  of  the  19th  of  February,  I  received 
a  letter  from  W.  B.  Ogden,  Esq.  of  the  7th  of  March,  1840,  as  one  of  a 
committee  appointed  by  the  contractors  on  the  canal;  in  which  he  in- 
formed me  that  you  had  consented  to  permit  the  contractors  to  avail 
themselves  of  the  contract  with  Me?srs.  Wright  &  Co.  and  urging  me  to 
retain  for  their  benefit  all  money  drawn  on  that  account,  &c.  (See  his 
letter  to  me,  No.  8,  with  your  note  at  the  bottom;  my  reply,  No.  9;  and 
your  letter,  No.  10.) 

In  the  same  letter  you  requested  Governor  Reynolds  and  myself  to  pro- 
ceed to  some  ofthe  eastern  cities,  and  sell  bonds,  ifpossible,to  the  amount 
of  $1,200,000,  (for  canal  purposes,  and  for  the  completion  of  the  State- 
house,)  provided  sales  could  be  effected  at  par.  We  according!^  proceeded 
^o  New  York;  but,  so  far  from  being  able  to  effect  sales  at  par,  we  could 
not  at  that  time  have  sold  our  bonds  at  75  cents  to  the  dollar.  See,  also, 
your  letter  of  March  26, 1840,  (No.  11.)  on  the  same  subject,  and  request- 
ing us,  in  the  event  of  our  not  succeeding  in  making  sales  as  instructed, 
to  deposite  $1,200,000  ofthe  bonds  in  my  possession  in  New  York  or  Phi- 
ladelphia, subject  to  the  order  of  the  Board  of  canal  commissioners.  These 
bonds  were  deposited  with  Messrs.  Nevins,  Townsend  &  Co.  in  New 
York,  and  subsequently  passed  into  the  hands  of  General  Thornton.  I 
beg  leave,  also,  to  refer  to  my  letter  to  you  of  May  15,  1840,  (No.  12.) 
and  especially  to  the  latter  part  of  it,  in  which  you  were  urged,  as  a  last 
resort,  to  approve  the  contract  made  with  Wright  &  Co.  and  the  reasons 
assigned  why  such  a  course  had  become  necessary  to  save  the  credit  of 
the  State.  The  next  letter  I  received  was  jours  of  the  1st  of  May,  1840, 
(No.  13,)  in  which  you  say  that  you  have  concluded  to  confirm  my  con- 
tract with  Messrs.  Wright  &  Co.  for  $1,000,000  of  canal  bonds,  provided* 
they  will  agree  to  promise  all  the  money  within  the  current  year,  &c.; 
and  that,  although  you  cannot  persuade  yourself  that  it  is  a  par  sale  ac- 
cording to  the  letter  ofthe  law,  yet  still  you  believe  it  is  at  par  according 
to  the  meaning  and  intention  of  the  Legislature  by  which  the  law  was 
enacted.  I  will  only  remark,  that  such  was  my  own  opinion  and  under- 
standing when  I  accepted  the  agency  to  sell,  and  that  in  conformity  with 
that  belief  I  acted.  I  communicated  the  new  terms  proposed  to  Messrs. 
Wright  &L  Co.  in  your  letter  of  May  1,  immediately  after  its  reception, 
by  the  steam  ship  British  Queen,  which  sailed  from  New  York  on  the  1st 
ot  June  following.  See  the  letter  of  Gov.  Reynolds  and  myself,  dated 
the  26th  of  May,  1840,  (No.  16.)  See,  also,  my  letter  to  you,  dated  May 
26,  1840,  (No.  14,)  in  which  reasons  are  likewise  assigned  for  not  paying 
over  the  $10,000  to  General  Thornton,  and  for  not  drawing  for  the 
£20,000  which  was  payable,  by  the  terms  of  the  agreement,  on  the  15th 
of  July,  1840.  See,  also,  my  letter  to  Gen.  Thornton  of  May  25,  1840, 


5  [353] 

{No.  15,  in  the  appendix,)  on  the  same  subject.  After  our  letter  of  May 
25th,  to  Gen. Thornton,  in  which  we  declined  doing  any  thing  until  it  was 
known  that  Messrs.  Wright  &  Co.  had  accepted  of  the  alteration  pro- 
posed by  your  letter  of  the  1st  May,  he  returned  back  to  Washington 
from  New  York,  and  informed  Gov.  Reynolds  and  myself  thai  he  had 
succeeded  in  procuring  $45,000  for  the  IVew  York  interest,  which  became 
due  in  that  city  on  the  tirst  Monday  in  July,  1840;  but  that  he  had  en- 
tirely failed  to  make  any  arrangement  for  the  interest  in  London, 
which  fell  due  on  the  same  day;  and  that,  unless  Governor  Reynolds  and 
myself  would  draw  for  the  £20,000,  he  would  be  under  the  necessity  of 
returning  to  Illinois,  as  nothing  more  could  be  done;  and  that  the  inevi- 
table consequence  would  be,  the  loss  of  our  credit  as  &  State,  perhaps  an 
abandonment  of  the  canal,  and  certain  ruin  of  the  contractors,  who  would 
be  left  without  mean?  to  proceed  any  further  with  their  contracts.  In 
this  emergency,  Gov.  Reynolds  and  myself  finally  concluded  to  draw  a 
conditional  draft  on  Messrs. Wright  &.  Co.  provided  Gen.  Thornton  would 
give  us  a  lien  upon  bonds  to  the  amount  of  £45,000,  in  the  hands  of  Ne- 
vins,  Townsend  &  Co.  to  secure  us  against  any  improper  use  of  the  draft; 
which  he  agreed  to  do.  For  an  explanation  of  this  transaction,  I  refer 
you  to  our  letter  to  John  Wright  &  Co.  of  May  29,  1840,  (No.  1*3,)  with 
the  vouchers  A,  B,  and  C,  which  follow;  to  General  Thornton's  letter  to 
Nevins,  Townsend  &  Co,  of  May,  29,  1840,  (No.  19,)  and  his  letter  to 
you  of  June  1,  1840,  (No.  18,  in  the  Appendix.)  Some  time  in  July  I 
received  a  letter  from  Mr.  Wright,  dated  June  30,  1840,  in  which  he  in- 
formed me  that  ho  had  accepted  our  draft  for  the  £20,000,  and  that  bonds 
enough  had  been  sold  to  cover  the  amount;  that  he  had  made  a  pro- 
visional arrangement  with  General  Thornton  for  the  continuance  of  sales 
until  March,  1841;  but  says  nothing  about  accepting  the  terms  proposed 
in  our  letter,  of  securing  the  entire  amount  to  be  paid  within  the  year 
1840,  as  prescribed  in  your  letter  of  instruction  on  that  subject.  See  his 
letter  to  Gov.  Reynolds  and  myself,  (No.  20.) 

In  your  letter  of  June  14,  1840,  you  for  the  first  ti»e  approve,  uncon- 
ditionally, of  the  contract  with  Wright  &  Co.  provided,  in  my  judgment, 
it  could  be  made  available  to  save  the  credit  of  the  State,  as  you  saw  no 
other  means  of  averting  that  calamity.  You  also  express  surprise  in  that 
letter,  that  General  Thornton  should  have  understood  you  as  approving 
the  contract  unconditionally,  before  he  came  to  Washington,  as  such  was 
not  your  intention;  and  that  you  could  not  disapprove  of  my  caution, 
situated  as  I  was,  in  holding  the  proceeds  of  the  £10,000  untouched,  for 
reimbursement,  in  case  he  (Mr.  Wrighi,)  should  decline  the  proposed 
change  of  contract.  See  No.  21,  in  appendix;  your  letter  to  Governor 
Reynolds  and  myself,  dated  June  25,  1840,  (No.  22,)  and  your  letter  to 
myself,  dated  July  2,  1840,  (No.  23.)  In  the  last  letter  referred  to,  you 
say:  "It  would  seem  by  Gen.  Thornton's  letter  to  me,  that  some  mis- 
understanding existed  in  relation  to  the  payment  of  the  July  interest, 
as  it  seems  that  he  expected  me  to  direct  you  tp  apply  the  £10,000  which 
you  have  drawn,  and  the  £20,000  which  you  were  authorized  to  draw 
for,  to  its  payment.  This  1  could  not  do  before  Mr.  Wright  had  consent- 
ed to  the  proposed  alteration  of  the  contract."  You  also  informed  me 
that  the  £225,000  of  renewed  bonds,  with  semi-annual  interest,  would 


[354]  6 

be  forwarded  to  me  by  the  Auditor  of  State,  with  instruction  to  send 
them  as  early  as  possible  to  Gen.  Thornton,  at  London,  to  be  substituted 
for  the  old  bonds,  of  that  amount,  left  with  Wright  &  Co.  under  my  con- 
tract; and  to  request  Mr.  Wright,  on  receipt  of  them,  to  cancel  the  old 
ones,  and  to  send  them  to  you  by  Gen.  Thornton,  on  his  return  to  the 
United  States.  Mr.  Edmund  Roberts,  of  Springfield,  brought  these  bonds 
to  Washington,  and  at  my  request  took  them  to  Nevins,Townsend,  &  Co. 
of  New  York,  who  forwarded  them  to  London.  See  the  letter  of  Gover- 
nor Reynolds  and  myself  on  this  subject,  dated  July  20,  1810,  to  John 
Wright  &  Co.  (No.  24,)  and  Mr.  Wright's  letter  to  me  of  the  29th  of 
August,  1840,  (No.  25,)  in  which  he  acknowledges  the  receipt  of  the 
bonds,  and  proposes^to  transfer  a  portion  of  them  to  Messrs.  Smiths.  Mag- 
mac  &  Co.  on  account  of  the  agreement  made  with  that  house  by  General 
Thornton,  for  the  benefit  of  the  contractors  on  the  canal.  On  the  15th 
of  October,  1840,  I  wrote  to  Messrs.  Wright  &  Co.  at  the  request  of 
General  Thornton,  and  with  your  approbation, (both  of  you  being  present 
at  the  time,)  and  requested  them  to  transfer  all  the  new  bonds  received 
to  Messrs.  Smiths,  Magniac  &  Co.  as  suggested;  which  I  suppose  has 
been  done  as  I  have  heard  nothing  to  the  contrary.  See  my  letter  to 
Wright  &  Co.  (No.  26.)  I  have  received  the  copy  of  a  letter  addressed 
to  your  Excellency,  by  Samuel  Allinson,  Esq.  late  agent  of  the  house  of 
Wright  &  Co.  in  London,  dated  December  1,  1840,  (No.  28,)  to  whicb 
I  beg  leave  to  call  your  attention,  for  the  purpose  of  showing  that  no 
loss  will  be  sustained  by  the  failure  of  that  old  and  respectable  house, 
and  the  necessity  of  appointing  a  special  agent  to  receive  the  unsold 
bonds,  as  they  have  passed  out  of  their  hands  under  the  assignment  of 
bankruptcy.  As  soon  as  I  heard  of  this  failure,  at  New  York,  I  immedi- 
ately advised  you  of  the  fact,  and  addressed  letter?  to  Messrs.  Wright  & 
Co.  and  Samuel  Jaudon,  Esq.  (Nos.  29  and  30,)  to  which  I  refer  you,  in 
relation  to  the  course  I  thought  it  my  duty  to  pursue,  to  save  the  State 
from  injury  by  any  attempt  at  a  misapplication  of  the  unsold  bonds,  by 
requesting  their  immediate  delivery  to  Mr.  Jaudon,  as  our  agent.  Your 
verbal  instruction  to  use  the  avails  of  the  £10,000  in  payment  of  the 
interest  w*hich  became  due  on  our  canal  bonds,  in  New  York,  on  the  first 
Monday  in  the  present  month,  just  before  I  left  home  for  Washington, 
is  therefore  the  first  instruction  which  I  have  received  to  make  an  appli- 
cation of  these  funds  to  the  purposes  of  the  State,  as  will  appear  by  the 
annexed  correspondence,  and  an  extract  from  your  message  to  the  Gene- 
ral Assembly  of  Illinois  of  the  26th  of  November,  1840,  (No.  27,)  and  also 
an  extract  from  the  same  message  (No.  3*2,)  in  which  reasons  are  also 
given  why  this  money  was  not  previously  paid  over  to  Gen.  Thornton. 

This  interest  on  our  canal  bonds,  amounting  to  $39,COO,  I  have  paid  in 
New  York, according  to  your  instruction,  with  the  further  sum  of  $11,000 
to  Nevins,  Townsend  &  Co.  in  part  payment  of  money  advanced  by  them 
to  Gen.  Thornton,  to  pay  the  interest  in  July  last;  making,  together,  the 
sum  of  $50,000.  See  my  letter  to  you,  from  New  York,  dated  Decem- 
ber 28,  1840,  (No.  31,)  and  the  accompanying  vouchers  (A,  B,  and  C.) 

Your  letter  of  December  12,  1840,  requesting  me  to  pay  this  interest, 
and  to  dcposite  the  residue  of  the  funds  in  some  safe  bank,  was  not  re. 
ceived  until  my  return  from  New  York,  on  the  30th  of  the  past  month; 


but  I  trust,  nevertheless,  that  the  payments,  as  made,  will  meet  jour  ap- 
probation. See  extract  from  your  official  letter,  dated  December  12, 1840. 
(No.  33.) 

During  the  time  of  purchasing  western  funds,  I  drew  checks  on  the 
Bank  of  the  United  States  as  frequently  as  it  was  convenient  to  make 
exchanges,  and  kept  my  deposites  in  the  Bank  of  Washington  in  this  city. 
When  it  became  necessary  to  convert  these  funds  into  such  as  were 
equal  to  specie  in  New  York,  I  continued  my  deposites  in  this  bank,  which, 
although  it  did  not  pay  specie  for  its  notes,  was  nevertheless  the  place  at 
which  the  members  of  Congress  received  their  compensation.  When  the 
deposites  consisted  of  drafts,  they  were  made  in  sealed  packets,  not  liable 
to  be  touched;  and  special  when  in  specie;  and  at  the  end  of  the  session, 
the  bank  gave  me  specie  drafts  on  New  York,  for  such  of  the  deposites 
as  had  been  made  in  gold  and  silver.  At  the  close  of  the  last  session  of 
Congress,  a  portion  of  these  funds,  consisting  chiefly  in  certificates  of  de- 
posite  on  the  banks  of  Illinois  and  Indiana,  were  still  on  hand,  and  could 
not  be  exchanged  in  the  eastern  market  without  a  losing  sacrifice.  These 
I  exchanged  chiefly  in  the  city  of  St.  Louis;  and  when  the  proceeds  were 
in  specie  or  notes  on  the  Bank  of  Missouri,  I  made  my  deposites  in  that 
bank;  where  they  remained  until  converted  into  eastern  exchange. 

I  found  much  difficulty  from  first  to  last,  and  was  at  considerable  ex- 
pense in  making  this  latter  conversion  into  par  funds.  And,  although  the 
last  exchanges  were  more  favorable  than  the  first,  on  account  of  a  rise  in 
the  value  of  western  bank  notes,  still,  when  taken  altogether,  I  was  well 
satisfied  to  find  that  nothing  had  been  lost  by  the  operation.  Surely 
nothing  has  been  gained,  commensurate  with  the  responsibility,  trouble, 
risk,  and  expense,  (to  say  nothing  of  the  abuse  I  have  received  from  those 
who  have  attempted  from  first  to  last  to  render  this  loan  ineffectual,)  in- 
curred in  bringing  this  matter  to  a  close.  No  loans  have  been  made  to 
any  bank,  broker,  or  other  individual,  of  any  part  of  this  money,  for  inter- 
est or  otherwise;  and  no  interest  has  at  any  time  been  received  from  any 
bank,  broker,  or  other  person,  on  such  account,  to  the  value  of  one  cent. 
I  have  thus  given  you  a  statement  in  detail  of  every  thing  concerning  the 
negotiation  with  the  house  of  Wright  &  Co.  since  the  contract  which  was 
made  on  the  30th  of  October,  1839.  General  Thornton  will  doubtless 
furnish  such  further  explanation  as'  may  be  required  in  relation  to  the 
proceeds  of  the  £20,000  draft,  as  I  have  no  further  information  than  I 
have  already  given  on  that  subject. 

Of  the  $4,000,000  of  sterling  six  per  cent,  canal  bonds  originally  issued, 
with  interest  payable  annually,  $1,000,000  was  sold  to  Thomas  Dunlap, 
Esq.  of  Philadelphia,  by  Messrs.  Rawlings  and  Reynolds;  $500,000  was 
delivered  to  General  Thornton,  by  your  direction,  at  Quincy;  $1,000,000 
was  left  on  deposite  for  sale  with  John  Wright  &  Co.  in  London,  under 
the  contract  of  October  30,  1839;  $1,200,000  was,  by  your  instruction, 
deposited  with  Messrs.  Nevins,  Townsend  &  Co.  in  New  York,  subject 
to  the  order  of  the  board  of  canal  commissioners;  and  the  residue, 
$300,000,  is  on  deposite  for  safe-keeping  in  the  Bank  of  the  United  States 
at  Philadelphia. 

Of  the  $2,000,000  of  new  bonds  in  denominations  of  £300  and  £100 
sterling,  with  interest  payable  semi  annually,  $1,000,000  was  sent  out  to 
Wright  &  Co.  and  supposed  to  have  been  transferred  to  the  house  of 


[356]  8 

Smiths,  Magniac  &  Co.  as  heretofore  explained;  and  the  other  $1,000,000 
last  received,  is  on  depositc  with  the  Bank  of  the  United  States  in  New 
York.  Thislatler  amount,  and  the  $300,000  on  deposite  in  Philadelphia, 
I  suppose,  had  better  he  cancelled  and  returned  to  Illinois;  but  nothing 
af  that  kind  can  be  done  with  propriety  without  your  special  instruction, 
[n  relation  to  the  statement  of  the  amount  of  deposite  to  my  credit,  as 
furnished  by  the  bank,  there  is  certainly  a  mistake,  either  by  the  mixing 
jp  of  other  accounts,  or  an  error  in  the  calculation,  as  the  amount  of  ex- 
changes agreed  for  would  not  produce  the  sum  stated.  This,  however,  is 
a  matter  between  the  bank  and  myself,  and  which  shall  be  corrected  on 
my  first  visit  to  Philadelphia,  if  such  an  error  should  be  detected.  All  that 
[  received  for  the  State,  under  the  contract  with  Wright  &  Co.  was 
£10,300— equal  to  $49,897  77  7-9  specie  funds  in  New  York,  including 
the  9  per  cent,  which  was  the  difference  agreed  to  be  given  in  exchange 
between  New  York  and  London.  A  pound  sterling  in  London  is  worth 
bul  84  44  4-9,  being  at  the  rate  of  four  shillings  and  six-pence  sterling  to 
the  dollar:  £10,300,  at  that  rate,  would  produce  $  15,77  777  7-9,  to  which 
add  9  percent,  or  $4,120,  the  difference  in  exchange,  and  it  makes  the 
sum  of  $49,897  77  7-9,  as  before  stated.  For  this  sum  I  was  liable,  but 
for  no  more.  It  is  true,  if,  instead  of  making  an  agreement  with  Mr. 
Jaudon  in  London  for  payment  in  Philadelphia,  I  had  brought  £10,300 
in  sovereigns  or  pounds  sterling,  in  gold,  that  they  would,  at  the  rate  of 
$4  85  to  the  sovereign,  which  is  the  current  value  in  this  country,  have 
produced  the  sum  of  $49,955  par  funds  in  New  York.  The  difference 
between  these  sums  being  on  account  of  insurance  and  other  charges  for 
transportation  between  London  and  New  York. 

The  sum  of  $49,897  77  7-9  in  specie  funds  at  New  York,  is  all,  there- 
fore, that  the  State  can  reasonably  claim  or  expect;  and  this  sum,  with 
an  overplus  of  $102  23,  has  been  paid  to  her  credit  according  to  your 
instruction. 

1  see  it  stated  in  some  of  the  newspapers  (unfriendly,  of  course,)  that 
this  money  was  originally  received  in  specie,  and  afterwards  used  in  pur- 
chasing the  notes  of  the  Bank  of  the  United  States,  on  speculation,  at  a 
great  depreciation.  I  need,,  only  say  that  such  was  not  the  fact,  as  the 
bank  was  then  in  a  state  of  suspension,  and  did  not,  and  would  not,  pay 
specie  for  any  of  its  liabilities;  this  being  the  reason  why  payment  was 
made  and  received  in  bank  notes,  but  at  such  rate  as  to  make  the  amount 
equal  to  specie,  as  before  explained.  When  I  went  to  England,  I  took 
wi  h  me  $3,900  of  money  of  the  State,  of  which,  on  my  return  to  the 
United  States,  I  enclosed  you  a  draft,  to  he  placed  in  bank  to  canal  ac- 
ccount,  for  $1.500;  retaining  only  $2,400,  the  actual  amount  of  my  ex- 
penses, which  is  all  that  I  have  received  for  compensation  and  expenses. 
You  may  recollect  having  proposed  to  allow  me  five  dollars  per  day  over 
and  above  these  expenses,  as  our  agreement  originally  was  when  I  ac- 
cepted this  agency,  that  I  should  be  paid  my  expenses  at  all  events;  and 
th.tt  the  compensation  would  depend  on  future  legislative  action;  and 
that  as  they  had  only  provided  for  the  payment  of  five  dollars  per  day, 
this  was  all  you  felt  authorized  to  allow;  but  suggested,  as  the  better 
way,  as  that  amount  was  considered  altogether  inadequate,  that  the  sub- 
ject should  again  bq  subjected  to  the  Legislature.  So  that  nothing  on  that 
account  has  been  received.  I  was  absent  on  this  mission  near  six  months 


before  my  return  to  Washington;  which,  at  five  dollars  per  day  would 
amount  to  near  $900.  Besides  this,  1  went  twice  to  New  York  at  your 
request,  on  State  business,  as  will  be  seen  by  the  annexed  correspon- 
dence, at  an  expense  each  time  of  about  fifty  dollars;  being  absent  each 
time  about  ten  days.  No  remuneration  has  been  made  on  these  accounts,, 
either  by  refunding  the  amount  of  expenses,  or  providing  any  compensa- 
tion. In  regard  to  the  payment  of  the  interest  on  our  State  bonds,  I  will 
venture  to  make  a  suggestion,  in  relation  to  the  causes  which  have  given 
you  so  much  trouble,  and  which  have  subjected  our  agents  to  so  much 
abuse,  for  an  occasional  assumption  of  responsibility,  and  an  apparent 
sacrifice  of  our  securities,  when  air  other  resources  had  failed  by  which 
our  credit  could  be  preserved. 

These  difficulties  have  been  constantly  produced,  by  requiring  bonds 
for  that  purpose  to  be  sold  at  par  only,  when  it  was  notorious  that  these 
bonds  most  frequently  on  such  occasions,  could  not  be  cashed  at  seventy- 
five  cents  to  the  dollar.  What  has  been  the  consequence?  The  Governor, 
or  agent  under  his  instruction,  must  either  resort  to  expedients  unauthor- 
ized by  law,  or  suffer  the  credit  of  the  State  to  perish.  In  this  way,, 
great  injustice  is  often  done  to  and  undue  exactions  extorted  from,  those 
who  are  bona-fide  purchasers  of  these  bonds.  As,  for  instance,  (and  as 
has  actually  been  the  case  several  times  within  my  knowledge,)  the  Le- 
gislature fails  to  make  efficient  provision,  in  proper  time,  for  the  pay- 
ment of  interest;  our  ogent,  not  being  able  to  raise  the  amount  required, 
by  a  sale  of  bonds,  and  especially  at  par,  according  to  the  law  and  his  in- 
structions, goes  to  the  Bank  of  the  United  States,  to  Nevins,Townsend  & 
Co.,  or  somebody  else,  largely  interested  in  our  bonds,  (which  must  of  con- 
sequence become  greatly  depreciated,  if  not  valueless,  on  a  failure  to  pay 
interest,)  states  his  difficulties,  and  tells  them,  if  they  do  not  come  forward 
and  make  advances,  that  they,,  as  well  as  the  credit  of  the  State,  must 
suffer,  and  that  no  other  resources  are  left  to  him,  &c.;  and  in  this 
way  coerces  an  advance  of  money,  whether  willing  or  unwilling,  to  an- 
swer present  purposes;  and  for  which  afterwards  both  he  and  they  were 
censured  for  an  illegal  hypothecation  of  bonds,  when  all  else  had  failed  by 
which  the  interest  and  credit  of  the  Slate  could  be  preserved. 

This  matter  of  providing  for  the  payment  of  interest,  so  essential  to 
all  concerned,  ought  never  to  be  postponed  to  the  last  day,  nor  left  to  de- 
pend in  the  slightest  degree  on  remote  contingencies,  which  are  always 
uncertain,  and  ought  never  to  be  relied  on. 

It  appears  to  me  that  much  the  better  plan  would  be  to  establish  for 
this  purpose  a  permanent  agency  in  New  York.  Such  an  agent  being 
always  upon  the  ground,  better  acquainted  with  the  fluctuations  which 
are  continually  going  on  in  the  money  market,  would,  from  his  position 
and  superior  information,  have  it  in  his.  power  to  take  advantage  of  cir- 
cumstances, make  more  advantageous  arrangements,  and  be  more  prompt 
of  course,  in  providing  means  as  they  are  wanted.  I  would  also  again 
direct  your  attention  to  the  immediate  necessity  of  appointing,  under 
some  new  authority  of  law,  a  special  agent  to  settle  up  our  business  with 
the  late  house  of  Wright  &,  Co.  in  London,  and  to  receive  and  trans- 
mit the  unsold  bonds.  If  a  London  agent  should  be  appointed,  I  should 
think,  under  all  circumstances,  that  Mr...  Jaudon  ought  to  be  preferred. 


[358]  10 

T  1        •  TU  Ml  1         J  11  f          xl_       U 

In  conclusion,  I  hope  you  will  make  due  allowance  for  the  hasty  man- 
ner in  which  this  statement  has  been  prepared,  as  I  have  bestowed  upon 
it  such  time  only,  since  my  return  from  New  York,  as  was  permitted  at 
intervals  when  not  necessarily  engaged  in  legislative  duties,  which  arc 
not  without  their  labor,  whatever  may  be  thought  of  them  elsewhere.  The 
annexed  correspondence  I  have  had  some  trouble  in  arranging;  but,  volu- 
minous as  it  may  appear,  it  is  still  necessary  to  a  proper  understanding 
of  the  manner  in  which  the  business  connected  with  my  agency  has 
been  transacted.  In  my  negotiation  with  Wright  &  Co.  in  London,  I 
have  not  touched  a  cent  in  commission,  per  cents.,  or  otherwise,  save 
the  £10,300  for  which  I  have  accounted;  an-d  I  refer  with  pride  to  all 
with  whom  I  have  had  any  thing  to  do,  as  an  agent  of  Illinois,  as  well  in 
London  as  in  the  United  States,  for  the  rectitude  of  the  course  which 
has  uniformly,  I  trust,  governed  all  my  actions. 

All  which  is  respectfully  submitted, 

RICHARD  M.  YOUNG. 


• 
. 

APPENDIX. 


No.  1. 

. 

Samuel  Jaudon  to  R.  M.  Young. 

i    ;»,;•.,  -\f  t        i      i  oon 

LONDON,  November  1,  looU. 

DEAR  SIR:  I  sent  your  order  to  Messrs.  Wright  &  Co.  this  morning; 
and  in  reply  received  a  note  from  them,  stating  that  they  could  not  ac- 
cept the  order,  but  that  the  amount  would  be  paid  on  the  15th  of  Janu- 
ary. I  therefore  have  thought  it  best  to  return  the  order  to  you;  and,  for 
fear  of  any  accident  to  this  letter,  I  have  enclosed  it  to  J.  Cowperth- 
waite,  Esq.,  Cashier  of  the  Bank  of  the  United  States,  who  will  hand  it 
to  you. 

As  soon  as  you  reach  Philadelphia,  you  can  draw   a  bill  on  Wright  & 
Co.  in  the  usual  form,  payable  on  the  15th  of  January.     This  will  pro- 
bably be  quite  as  well  as  if  they  had  accepted  the  order. 
Wishing  you  a  pleasant  passage, 

I  am,  dear  Sir,  yours,  very  truly, 

S.  JAUDON, 
Hon.  R.  M.  YOUNG, 

On  board  the  British  Queen. 


11  [359] 

No.  2. 
JR.  M.   Young  to  John  Wright  $  Co. 

PHILADELPHIA,  November  30,  1839. 

GENTLEMEN:  I  was  advised  by  your  confidential  clerk,  (who  drew,  at 
my  request,  the  order  which  was  presented  to  you  for  the  £10,000  ster- 
ling on  our  contract,  dated  the  30th  of  October  ultimo,  by  Mr.  S.  Jau- 
don,  agent  of  the  Bank  of  the  United  States,  on  the  morning  after  I  left 
London  in  the  British  Queen,)  that  you  could  not,  according  to  the  cus- 
tom of  London,  accept  a  bill  or  order  drawn  in  London,  but  would  give 
Mr.  Jaudon  an  assurance  that  the  amount  would  be  paid  on  the  15th  day 
of  January,  according  to  your  stipulation  in  the  said  agreement.  This 
assurance  I  supposed  would  be  satisfactory  to  Mr.  Jaudon,  and  would 
answer  his  purpose  as  well  as  an  acceptance.  On  my  arrival  at  Ports- 
mouth, I  received  a  note  from  Mr.  Jaudon,  in  which  he  mentioned  that 
the  order  had  been  presented,  and  that  he  had  received  an  assurance  from 
you  that  the  amount  would  be  paid  on  the  15th  of  January  next;  but  that, 
on  further  reflection  he  had  concluded  to  return  the  order  to  me,  and 
wait  until  I  could  arrive  at  Philadelphia,  and  draw  a  bill  according  to  the 
regular  course  of  business.  I  have  accordingly  taken  up  and  cancel- 
led the  order,  and  have  this  day  drawn  upon  you  for  £10,000  sterling, 
in  duplicate,  in  favor  of  J.  Cowperthwaite,  chashier  of  the  Bank  of  the 
United  States  at  Philadelphia,  payable  the  15th  day  of  January  next, 
being  the  first  amount  agreed  to  be  advanced  on  our  contract  of  the  30th 
of  October,  1839,  for  $1,000,000,  or  £'225,000  sterling,  of  "Illinois  and 
Michigan  canal  stock;"  which  I  hope  you  will  honor  and  pay,  according 
to  the  terms  of  said  agreement. 

Since  my  arrival  in  the  United  States,  I  have  learned  with  pleasure 
that  Governor  Carlin,  of  Illinois,  has  issued  a  proclamation  to  convene 
the  Illinois  General  Assembly  on  the  first  Monday  in  December  instant. 
This  arrangement  will  consequently  enable  me,  without  any  delay,  to 
direct  the  Governor's  attention,  and  through  him  that  of  the  General 
Assembly,  to  the  importance  of  changing  the  form  of  the  bonds,  so  as  to 
make  the  interest  payable  semi-annually,  and  in  other  respects  as  sugges- 
ted and  stipulated  in  our  agreement  of  the  30th  of  October.  I  have  no 
doubt  that  I  will  be  able  to  effect  the  change  in  the  manner  desired,  and 
will  see  that  no  unnecessary  delay  is  permitted. 

Please  let  me  hear  from  you  as  early  as  may  suit  your  convenience. 
Address  me  at  Washington  City. 

Very  respectfully, 

Your  obedient  servant, 

RICHARD  M.  YOUNG. 
Messrs.  WRIGHT  &  Co. 


[360J  12 

No.  3. 

From  John    Wright  fy  Co.  to  R.  M.   Young. 

LONDON,  January  4,  1840. 

DKAR  SIR:  In  answer  to  your  favor  of  the  30th  of  November,  received 
by  the  British  Queen,  I  was  most  delighted  to  see  your  handwriting;  for 
I  was  really  not  without  apprehension  for  you,  on  account  of  the  illness 
which  you  labored  under  in  Hegent  street. 

There  will  be  no  difficulty  in  paying  your  bill  of  £10,000,  and  I  am 
happy  to  say  that  notwithstanding  the  badness  of  the  times,  we  have 
sold  enough  bonds  to  meet  it,  and  have  a  fair  prospect  of  a  good  market 
for  them;  and  am  therefore  happy  to  find  you  intend  to  send  over  the  ad- 
ditional bonds  confided  to  your  negotiation,  and  which  I  trust  we  shall 
sell  on  favorable  terms,  as  all  alarm  about  American  State  securities  is 
fast  subsiding,  and  I  trust  it  will  be  long  before  we  experience  a  year  of 
similar  difficulty  to  that  now  passed. 

I  am  glad  you  anticipate  no  difficulty  in  altering  the  bonds  to  the  form 
you  mention;  and  I  hope  to  arrange  with  Mr.  Jaudon.that  we  may  be 
the  sole  agents  for  the  Illinois  State,  and  trust  we  shall  transact  its  busi- 
ness to  its  entire  satisfaction. 

Pray  send  the  bonds  in  the  altered  form  as  soon  as  you  can. 

My  respectful  compliments  to  Mrs.  Young,  and  best  regards  to  Gov- 
ernor Reynolds  when  you  see  him;  and  believe  me,  with  every  good 
wish  of  the  season, 

Yours,  ever  sincerely, 

JOHN  WRIGHT. 
RICHARD  M.  YOUNG,  Esq., 

Washington  City,  United  States. 


No.  4. 
From  John  Wright  fy  Co.  to  R.  M.  Young. 

HENRIETTA  STREET,  LONDON, 
March  18, 1840. 

MY  DEAR  SIR:  1  am  sorry  that  I  have  not  heard  from  you  since  your 
favor  of  the  30th  of  November. 

I  had  the  pleasure  of  writing  to  you  on  the  4th  of  January,  and  I  was 
congratulating;  myself  on  having  sold  enough  of  your  bonds  to  fulfil  my 
contract,  (and  which  was  done  with  extreme  difficulty  when  some  prin- 
ted documents  received  from  the  United  States  have  given  me  the  painful 
information  that  the  legality  of  our  contract  is  questioned;  and  I  am  of 
course,  prevented  carrying  out  some  arrangements  which  1  thought  would 
have  ensured  a  regular  sale  of  the  bonds  through  our  insurance  office, 
which  would  have  been  as  agreeable  to  you  as  it  would  have  been  grati- 
fy ing  to  me.  Instead  of  which,  I  see  myself  designated  as  a  shark  and 


13  [361] 

usurer  in  a  public  document,  and  one  who  wished  to  take  every  advan- 
tage over  your  countrymen.  Now,  I  with  difficulty  got  92  for  the  bonds 
I  have  sold;  but  could  I  insure  one  per  cent,  commission  for  all  our  labor, 
I  should  be  quite  satisfied.  But,  as  I  told  you  when  here,  it  is  impossi- 
ble to  sell  the  bonds  in  the  city,  or  on  the  continent,  without  giving  a 
handsome  margin  to  brokers  or  other  sub-agents;  and  all  I  can  say  on 
this  subject  is,  it  will  ever  be  my  study  to  get  you  the  highest  price;  but 
1  cannot  do  what  is  impossible. 

We  write  to  you  more  officially  to-day,  so  I  shall  only  add  that  I  am 
sure  the  conduct  pursued  will  mortify  you  as  much  as  it  has  done  me. 

Your  dollar  sixes  were  selling  here  at  a  much  more  than  a  proportion- 
ate depreciation;  and  you  must  be  aware  that  the  State  of  Indiana,  and 
many  others,  interpreted  the  par  exchange  exactly  as  we  did. 

It  is  doubly  mortifying,  as  I  had  resolved  to  accept  no  other  agency 
than  that  of  Illinois,  and  had  hoped  soon  to  have  got  you  the  most 
remunerating  prices  for  your  bonds,  and  had  even  flattered  myself  I 
should  have  some  day  seen  your  fine  country,  and  witnessed  the  improve- 
ments made  in  it  by  the  great  openings  contemplated  from  Chicago  to 
Cairo;  but  I  fear  this  will  now  all  end  like  a  dream.  My  best  regards  to 
Governor  Reynolds,  who,  I  am  sure,  will  alike  feel  much  annoyed  at 
this  extraordinary  conduct  of  your  statesmen. 

It  will  be  useless  to  send  more  bonds  till  we  know  how  to  act,  without 
reproach  on  our  side  of  the  water  as  well  as  yours. 

Surely  money,  even  at  10  per  cent.,  would  be  cheaply  borrowed  for 
such  remunerating  communications. 

The  conduct  pursued  is  to  me  inconceivable. 

I  hope  Mrs.  Young,  as  well  as  yourself,  is  quite  well;  and  remain, 

Yours,  ever  sincerely, 

JOHN  WRIGHT. 
RICHARD  M.  YOUNG,  Senator  of  Illinois, 

Washington  City,  United  Stales. 


No.  5. 
From  S.  Jaudon  to  R.  M.  Young. 

LONDON,  March  18,  1840. 

Sm:  Feeling  most  deeply  how  very  important  it  is,  not  only  as  it 
regards  the  Illinois  State  stock,  but  the  stocks  of  all  the  other  States,  that 
the  acts  of  the  commissioners,  in  their  contracts  with  Messrs.  Wright  & 
Co.  and  Messrs.  Thompson  &  Forman,  should  not  be  repudiated,  by  the 
Legislature,  in  so  far,  at  least,  as  they  have  been  bona  fide  acted  upon, 
I  cannot  avoid  appealing  to  you  in  regard  to  the  report  which  has  been 
presented  by  a  majority  of  the  Judiciary  committee  on  this  subject. 

The  question  as  to  par  was  discussed  here  verv  often;  and  although 
(as  you  may  recollect)!  differed  in  opinion  from  you,  yet  the  fact  that 
$1,000  were  considered  equal  to  j£225  sterling  by  the  Indiana  and 
v 


[362J  14 

Alabama  Commissioners,  and  that  those  States  had  sanctioned    this   in- 
terpretation, was  considered  sufficient  to  settle  that  question. 

As  to  price,  I  can  mention  to  you  that  I  have,  within  the  past  week, 
bought  for  a  house  on  the  continent  upwards  of  $50,000  of  the  dollar 
Illinois  six  per  cents,  of  1860  and  1870,  at  78  to  78*  per  cent.  This, 
with  the  usual  difference  of  ten  per  cent,  for  sterling  bonds,  would 
only  place  those  which  Messrs.  Wright  &  Co.  have  at  88  and  88i  per 
cent.;  so  that  the  sales  which  they  have  made  have  been  considerably 
above  the  current  market  price.  The  State  has,  therefore,  had  its  mo- 
ney on  the  best  possible  terms  that  the  market  would  afford;  and  the 
contractors  deserve  great  credit  for  having  sold  the  bonds  so  well. 

I  trust  that  you  will  use  your  influence  so  far,  at  least,  as  to  prevent 
any  interference  with  the  sales  that  have  bona  fide  been  made.  If  the 
Legislature  are  not  satisfied,  let  them  stop  all  future  sales;  but  it  would 
be  most  unwise,  impolitic  and  injurious  to  touch  the  past.  The  State 
will  have  to  resort  to  this  market  for  the  means  of  completing  its  pub- 
lic works;  and  it  is  better  that  it  should  submit  to  the  sales  that  have 
been  made  on  the  very  best  terms,  than  cause  the  slightest  reason  for 
distrusting  its  good  faith  or  that  of  its  agents. 

I  am,  with  great  respect, 

Your  obedient  servant, 

S.  JAUDON. 
Hon.  R.  M.  YOUNG, 

Senate  of  the  United  States,  Washington. 

I  beg  you  to  communicate  with  Governor  Reynolds  upon  this  impor- 
tant matter. 


No.  6. 
Extract  of  a  letter  from  Governor  Carlin  to  R.  M.   Young* 

SPRINGFIELD,  February  3,  1840. 

DEAR  SIR:  The  Legislature  has  this  day  adjourned.  A  resolution 
passed  both  Houses,  annulling  all  the  negotiations  for  money  made  by 
the  agents  of  the  State  during  the  past  year,  and  absolving  the  State 
from  liability;  but  was  reconsidered  in  the  Senate.  A  resolution  passed 
the  House  requiring  the  Secretary  of  State  to  transmit  said  resolution  to 
Messrs.  Wright  &  Co.,  in  London,  declaring  that  no  law  existed  in  Illi- 
nois authorizing  the  sale  of  bonds  at  £91  to  £100,  and  requesting  a  re- 
turn of  the  bonds  placed  in  his  hands  as  your  agent.  This  resolution 
was  defeated  in  the  Senate.  As  the  Legislature  have  declined  appro- 
bating your  arrangement,  I  do  not  feel  at  liberty  to  confirm  it;  but  how 
the  business  can  be  adjusted,  I  am  not  prepared  to  say,  as  I  presume 
you  have  drawn  upon  Messrs.  Wright  &  Co.  for  £10,000,  &c. 

I  leave  to-morrow  in  the  stage  for  Quincy,  and  will  write  to  you  again. 

In  great  haste,  your  friend, 

THO,  CARLIN, 
Hon.  R.  M.  YOUNG. 


15  [363] 

No.  7. 

From  Gov.  Carlin  to  R.  M.  Young. 

QUINCV,  ILLINOIS,  February  19,  1840. 

DEAR  SIR:  Yours  of  the  28th  ultimo  came  to  hand  yesterday,  enclo- 
sing a  draft  in  my  favor,  of  $1,500,  upon  the  State  Bank  of  Illinois,   for 
the  use  of  the  canal.     It  would  have  afforded  me  pleasure  to  have  com- 
plied with  your  request,  by  laying  your  letter  before  the  Legislature,  had 
it  been  received  before  the  adjournment.     A  resolution  passed  the  House 
of  Representatives,  declaring  (as  I  was  informed)  that  no  law  of  Illinois 
authorized  the  sale  of  State  bonds  in  Europe,  or  elsewhere,  at  91  to  the 
100,  arid  requiring  the  Secretary  of  State  to  communicate  said  resolution 
to  Messrs.  Wright  &  Co.  of  London,  demanding  a  return  of  the   bonds 
placed  by  you  in  the  hands  of  said  company.     This  resolution,  however, 
did  not  pass  the  Senate;  but  all  legislative  action  during  the  session  dis- 
approbated  ail  negotiations  made  during  the  last  year,  both  for  the    ca- 
nal and  internal  improvement.     I  could  not  therefore  consent  to  assume, 
the  responsibility  of  ratifying  your  contract  with  Messrs.  Wright  &  Co. 
after  the  many  strong  expressions  of  disapprobation  by  the  Legislature. 
I  would  therefore  advise  cancelling  the  contract,  and    a   surrender  and 
return  of  the  bonds  by  Messrs.  Wright  &  Co.     The  friends  of  the  canal 
did  not  desire  its  consummation,  on  the  ground  that  no  reliance  could  be 
placed  upon  it  to  furnish  funds  for  the  use  of  the  canal,  as  all  seemed  to  de- 
pend upon  the  sale  of  bonds  by  Messrs.  Wright  &  Co.     1  think  I   advis- 
ed you  in  my  last  that  an  act  had  passed  allowing  five  dollars  per  day 
(only)  as  compensation  for  the  service  of  all  agents  of  the  State  employed 
in  the  negotiation  or  transportation  of  money,  except  in  cases  of  specific 
contracts  by  which  I  had  agreed  to  allow  a  larger  compensation.     This 
act  I   consider  oppressive,   as  the  compensation  allowed  by  it  will  fall 
greatly  short  of  paying  the  travelling  expenses  of  the  agents  while  in  the 
service  of  the  State.     We  cannot  be  envied  for  patriotism,  when  it  shall 
be  known  that  we  refuse  to  compensate  individuals  for  services  render- 
ed by  them  in  accordance  with  law,  or  even  to   allow  them   a  suiticient 
sum  to  cover  their  expenses.     The  amount  retained  by  you  being  only 
equal  to  your  expenses  while  actually  engaged  as  agent  of  the  State,    all 
notions  of  justice  and  equity  would  seem  to  forbid  the  restoration  or  re- 
payment ot  any  part  of  it;  but  the  compensation  allowed   you  by  the  re- 
cent act  of  the  Legislature  will  not   probably  cover  half  that  amount. 
Being  fully  satisfied  that  the  public  good  seldom  or  never  requires  private 
sacrifice,!  think  I  hazard  little  in  saying  that  the   next  Legislature    will 
make  an  allowance  more  proportioned  to  the  importance  of  the   service 
in  which  you  were  engaged;  and  as  a  return  of  the  whole  amount  expen- 
ded by  you  while  on  your  tour  from  this  place  to  Europe  and  back  again 
must  seriously  affect  your  private  means,  I   cannot  see  any   impropriety 
in  withholding  it  until  after  the  meeting  of  the  next  Legislature;  and,  if 
proper  compensation  is  not  then  allowed,  you  can  refund  the  money. 

An  act  passed  at  the  last  session,  allowing  the  canal  commissioners  to 
issue  scrip  to  meet  the  liabilities  of  the  canal  up  to  the  first  of  March  next; 


[364]  16 

• 

after  which  time  the  contractors  propose  to  receive  State  bonds  at  parr 
until  funds  can  be  procured.  This  plan  I  have  objections  to,  as  it  will 
tend  to  reduce  the  value  of  the  bonds,  and  com;  el  the  contractors  to  sell 
them  at  any  price  they  will  command.  But  a  portion  of  them  allege 
that  they  cannot  abandon  the  work;  and  it  would  appear  unjust  tore- 
fuse  the  payment  of  the  estimates  due  them  in  bonds  at  par. 

An  act  passed  authorizing  the  issuing  ojf  bond?,  and  the  sale  of  them, 
for  canal  purposes,  the  interest  payable  semi-annually.  If  it  is  possible, 
I  hope  you  will  effect  a  sale  in  the  United  States  of  $1,000,000;  but  the 
contract  must  be  complete  par  at  the  place,  and  in  the  currency,  where 
the  contract  is  made.  I  am  thus  particular,  in  order  to  avoid  futuie  cen- 
sure, which  must  and  will  always  follow  disappointment  and  failure. 

#**#**** 

Your  friend, 

THO.  CARLIN. 
Hon.  R.  M.  Youwo. 


No.  8. 

Letter  from  W.  B.  Ogden,  of  Chicago,  to  R.  M.    Young,  with  a   note  ai 
bottom  by  Governor  Carlin. 

QUINCY,  March  7,  1840. 

DEAR  SIR:    As  one  of  a  committee  appointed  by  contractors  on  the 
Illinois  and  Michigan  canal,  I  am  on  a  visit  to  his  Excellency    Governor 
Carlin,  with  a  view  to  some  settled  policy  for  progressing  with  the  work 
upon  the  canal  the  ensuing  season. 

The  contractors  are  willing  to  carry  on  their  work,  if  they  can  receive 
payment  in  bonds,  at  par.  to  4)e  hypothecated  or  sold  for  their  account, 
through  a  proper  and  prudent  agent,  in  large  parcels,  and  in  such  a  man- 
ner as  not  to  injure  the  credit  of  the  bonds. 

The  Governor  has  assented  to  this  arrangement;  and  the  contractors 
are  extremely  anxious  to  avail  themselves  of  your  arrangement  with 
Wright  &  Co.  for  a  million  or  a  million  and  a  half — accounting  to  the 
State  for  what  shall,  on  all  hands,  be  admitted  the  full  and  legal  par  value 
of  the  bonds  disposed  of.  The  contractors  expressed  to  me  their  strong 
desire,  before  I  left  Chicago  to  avail  themselves  of  this  arrangement,  if  it 
will  surely  prove  availing  in  the  course  of  the  summer.  And  any  funds 
that  you  may  have  received,  or  can  obtain  on  account  of  that  negotiation, 
the  contractors  are  very  anxious  to  obtain;  and  will  pay  any  difference 
to  the  State,  if  any,  that  shall  be  necessary  to  make  the  sale  par  to  the 
State.  And  they  beg  me  to  urge  upon  you  to  retain  any  such  money 
for  them,  to  remit  through  the  Governor  or  canal  commissioners,  for  their 
benefit. 


17  [365] 

The  Governor  says  he  has  written  you  to  withdraw  the  bonds  deposi- 
ted with  Wright  &  Co.,  altogether,  or  so  far  as  the  money  has  not  been 
received  upon  them. 

The  contractors  now  have  the  Governor's  consent  to  their  availing 
themselves  of  the  loan  contracted  by  you  with  Wright  &  Co.,  securing  the 
State  par  for  the  bonds,  provided  it  can  be  made  available  to  them;  and 
they  feel  almost  that  their  salvation,  in  a  business  point  of  view,  would 
be  found  in  obtaining  it. 

The  anxiety  felt  by  a  large  community  as  to  the  fate  of  the  canal,  is 
most  intense;  and  the  fate  of  a  thousand  business  men,  directly  or  indi- 
rectly, depends  upon  it. 

Payment  in  bonds  will  insure  the  progress  of  the  canal,  if  they  can 
be  properly  and  favorably  disposed  of.  But  an  early  realization 
is,  of  course,  vitally  important;  and,  with  that  view,  I  address  you,  in 
in  behalf  of  contractors,  in  relation  to  your  arrangement  with  Wright  & 
Co. 

Will  you  oblige  me  with  an  immediate  reply,  advising  me  of  the  par- 
ticulars and  prospects  of  that  negotiation?  And  if  any  thing  can  be  ob- 
tained from  it  beneficial  to  contractors,  withhold,  as  you  have  here  the 
Governor's  assent  to  do,  the  withdrawal  of  the  bonds  until  the  matter 
has  befjn  considered  by  contractors,  after  the  receipt  of  jour  reply  to  this, 
and  until  after  you  hear  from  me  again. 

Very  truly,  yours, 

W.  B.  OGDEN,  of  Chicago. 
Hon.  R.  M.  YOUNG. 
t 

The  subject  matter  of  the  above  letter  from  Mr.  Ogden  to  Judge 
Young  meets  with  my  approbation,  provided  the  money  can  be  realized  to 
suit  the  convenience  of  the  contractors — say  in  instalments  of  $200,000 
on  tiie  Lst  of  May,  July,  September,  November,  &c. 

THO.  CARLIN. 


t  •  No.  9, 

R.  M.   Young  to   William  B.  Ogden. 

WASHINGTON  CITY,  March  29,  1840. 

DEAR  Sin:  Yours  of  March  7th,  bearing  date  at  Quincy,  as  one  of  a 
^committee  appointed  by  the  contractors  on  the  Illinois  and  Michigan  ca- 
nal, was  received  by  last  evening's  mail;  ard  1  hasten  a  reply  by  the 
earliest  opportunity,  agreeably  to  your  request.  I  shall  feel  much  grati- 
fied if  I  can  in  any  way  be  of  assistance  in  saving  the  contractors  from 
bankruptcy  and  ruin,  the  canal  from  abandonment,  and  our  citizens  and 
•State  from  so  great  a  calamity.  The  contract  I  made  with  Messrs.  John 
Wright  &  Co.,  of  Henrietta  Street,  Covent  Garden,  London,  for  the  sale 
of  one  million  of  the  Illinois  and  Michigan  Canal  bonds,  was  most  un- 
questionably, a  much  better  contract  for  the  State  than  any  one  acquain- 
ted with  the  then  depressed  condition  of  the  money  market  in  London 


[366]  18 

supposed  could  have  been  made,  under  the  adverse  circumstances  atten- 
ding it;  and  was,  and  still  is,  in  my  opinion,  in  strict  conformity  with  the 
law  under  which  I  acted,  by  which  the  bonds  were  required  to  be  dispos- 
ofatpar.  The  bonds  were  severally  for  the  sum  of  £225  sterling,  or 
$1,000  in  our  currency,  estimating  the  pound  sterling  value  at  the  rate 
of  four  shillings  and  sixpence  to  the  dollar.  All  Governor  Reynolds  and 
myself  had  to  do  as  agents  of  the  State,  was  to  procure,  for  the  use 
of  the  canal  fund,  $  1,000  in  par  money  for  each  of  these  bonds.  Did 
we  make  such  an  arrangement?  The  agreement  with  Messrs.  Wright 
&  Co.,  which  I  forwarded  to  Governor  Carlin  was  for  £91  in  the  £100, 
in  London,  giving  the  benefit  to  the  difference  in  exchange  between  Lon- 
don and  New  York  to  the  State  of  Illinois,  which  at  that  time,  was  com- 
puted at  nine  per  cent,  with  a  condition  annexed,  that,  if  the  exchan- 
ges should  at  any  time  fall  below  nine  per  cent,  in  New  York,  and 
Messrs.  Wright  &  Co.  were  advised  of  that  fact,  they  were  to  increase 
the  price  of  the  bonds  above  £91,  in  proportion  to  the  fall  of  the  ex- 
changes, so  as  to  preserve  the  relative  value  of  the  bonds  as  contemplated 
by  the  agreement.  The  question  now  is,  would  this  price  produce  $1,000 
in  par  funds,  (by  'vhich  I  mean  specie)  for  each  of  the  bonds  in  Illinois! 
In  the  first  place,  I  draw  on  Messrs.  Wright  &  Co.,  at  New  York,  for 
£204  15s.  sterling  the  amount  for  which  I  sell  one  of  the  bonds  of  £'225 
or  $1000,  counting  at  the  rate  of  £91  in  the  £100.  I  sell  the  draft  in 
New  York  at  9  per  cent,  advance,  which  is  equal  to  £18  8s.  6d.  sterling, 
which,  added  to  the  sum  drawn  for,  makes  the  sum  of  £223  3s.  6d.;  this 
rendered  into  dollars  is  $992,  omitting  fractions.  I  deposite  this  sum  in 
one  of  the  banks  in  New  York,  and  a  draft  is  drawn  upon  it  by  the  canal 
commissioners  at  Chicago,  at  two  per  cent,  advance,  which  was  the  usual 
difference  in  exchange  between  Illinois  and  New  York  previous  to  the 
suspension  of  specie  payment  by  the  banks;  and  it  will  produce  in  Chi- 
cago, in  funds  equivalent  to  specie,  $1.010  84  cents.  But  an  illustration 
more  simple  and  easier  of  comprehension  may  be  given  to  such  as  are  not 
accustomed  to  calculate  exchanges,  and  the  rendering  of  pounds,  shillings, 
and  pence  into  our  currency. 

In  London,  a  sovereign  of  gold  is  exactly  a  pound  sterling,  or  twenty 
shillings,  British  currency.  Now,  suppose,  instead  of  leaving  the  money 
in  depcsite  with  Messrs.  Wright  &  Co.  in  London,  for  the  purpose  of 
making  drafts  upon  ic  in  New  York,  I  had  brought  with  me  the  avails 
of  one  of  these  £225  or  $1,000  bonds  in  gold.  I  would  have  had  at 
New  York  on  my  arrival,  204|  sovereigns.  A  sovereign,  according  to 
the  American  standard,  and  its  actual  value,  as  received  and  paid  out  by 
the  banks  in  New  York,  is  worth  four  dollars  and  eighty-five  cents. 
Those  sovereigns,  consequently,  would  be  equal  to  $993  and  a  fraction. 
This  sum  I  deposite  in  bank  at  New  York,  and  it  is  drawn  for  as  above  by 
the  canal  commissioners  at  Chicago,  at  two  per  cent,  advance.  The 
amount  realized  in  specie,  or  its  equivalent,  in  Illinois,  by  this  operation,, 
would  be  $1,012  86  cents.  Is  this  not  a  par  arrangement,  as  was  under- 
stood by  the  General  Assembly  by  which  the  law  in  question  was  enac- 
ted? Suppose,  for  instance,  after  these  bonds  were  executed  by  the 
Governor  for  sale  in  a  foreign  market,  $1,000  for  each  bond  had  been  of- 
fered in  Illinois:  would  not  the  proposition  have  been  accepted  as  being 
in  accordance  with  the  spirit  and  intention  of  the  law?  You  may  re- 


19  [367] 

collect  that  $ 500,000  of  these  sterling  bonds  were  delivered  to  General 
Thornton,  one  of  the  canal  commissioners,  for  sale  at  Chicago,  or  within 
the  limits  of  Illinois,  at  par:  now  was  it  expected  that  General  Thornton 
was  to  obtain  more  than  $1,000  for  each  of  these  bonds?  and  did  he  sell 
for  more,  or  not?  And  yet  these  were  a  parcel  of  the  same  sterling  bonds, 
for  the  sale  of  which  Governor  Reynolds  and  myself  made  the  arrange- 
ment with  Messrs.  Wright  &,  Co.  in  London,  It  is,  nevertheless,  true  that 
we  lose  the  difference  in  the  exchange,  in  the  payment  of  interest  and  in 
the  reimbursement  of  the  principal.  What  that  difference  may  be,  no  one 
can  tell.  Nor  can  it  be  known, at  (his  time,  whether  the  exchanges  will 
be  for  or  against  us,  when  the  principal  shall  become  due,  as  that  must  de- 
pend upon  the  course  of  trade  between  the  two  countries,  and  a  variety 
of  other  circumstances,  when  the  event  occurs.  Be  that  as  it  may,  the 
sale  was  considered  as  at  par,  according  to  the  signification  of  the  term 
among  bankers  and  merchants,  both  in  England  and  the  United  States. 
Before  the  agreement  was  signed,  Messrs.  Wright  &  Co.  submitted  it,  with 
the  laws  of  Illinois,  and  our  commissions  from  the  Governor,  under  which 
we  acted,  to  their  attorney,  (who  is  a  gentlemrn  of  acknowledged  legal 
ability  in  London,)  who  pronounced  it  a  par  arrangement,  and  in  con- 
formity with  the  law  and  our  powers;  and  such  being  my  opinion,  the 
contract  was  consummated  for  $1,000,000  of  the  bonds,  and  might 
have  been  extended  for  $2,500,000,  if  I  had  not  supposed  that  the  residue 
had  been  disposed  of  at  New  York,  by  my  colleague,  Governor  Reynolds, 
on  his  return  to  that  city.  You  will  also  bear  in  mind,  that  the  corn- 
missions,  &c.  of  Messrs.  Wright  &  Co.  for  selling,  were  to  be  discharged 
out  of  such  excess  over  and  above  the  £91  in  the  £100,  not  exceeding 
four  per  cent.,  as  might  be  realized  above  that  minimum,  and  that  all 
above  £95  in  the  £100  was  to  be  equally  divided  between  Messrs. 
Wright  &  Co.  and  the  State.  There  was  also  a  clause  which  prohibi- 
ted Messrs.  Wright  &  Co.  from  selling  below  the  minimum  of  £91,  even 
to  reimburse  themselves  for  advances,  which  were  to  be  made  at  five 
per  cent,  being  one  per  cent,  less  than  the  interest  on  the  bonds. 

This,  in  my  judgment,  is  decidedly  a  better  contract  than  can  be  made 
again;  and,  if  it  should  be  cancelled,  according  to  the  understanding  of 
the  late  General  Assembly,  as  I  am  advised  by  Governor  Carlin,  it  will 
be  a  hopeless  task  to  undertake  the  sale  of  Illinois  bonds  in  that  market, 
at  least;  and  the  credit  of  the  State  would  greatly  suffer,  1  fear,  both 
abroad  and  at  home,  for  the  want  of  confidence  in  its  future  legislation,  as 
it  respects  all  liabilities  for  moneys  advanced  in  aid  of  her  public  im- 
provements. As  for  selling  Illinois  bonds  in  New  York  or  Philadelphia 
at  par,  at  this  time,  I  should  think  it  would  be  utterly  impossible.  The 
last  sale  of  our  bonds  at  New  York  was  at  seventy-two  cents  to  the  dol- 
lar. A  short  time  ago,  Major  Charles  J.  Nourse,  exchange  broker  of  this 
city  informed  me  that  he  was  authorized  by  some  person  at  New  York  to 
offer  a  parcel  of  Illinois  bonds  to  the  Secretary  of  the  Treasury,  (who 
was  about  investing  some  Indian  annuities,  I  believe,  in  State  stocks,  at 
seventy-one  cents  to  the  dollar,  and  that  his  proposition  was  refused. 
Judging  from  these  facts,  therefore,  it  would  seem  that  a  par  arrangement 
could  not  at  this  time  be  effected  a*  either  of  these  cities. 

I  have  drawn  for  £10,000  on  the  contract  with  Messrs.  Wright  &  Co., 
which  is  received  and  could  be  made  immediately  available  to  the  canal 


[368J  20 

contractors,  as  soon  as  an  understanding  can  be  had  that  the  Governor 
will  sanction  a  renewal  of  the  contract  with  Messrs.  Wright  &  Co.,  and 
the  new  bonds  are  forwarded  to  London.  The  contract  as  it  now  stands, 
is  a  Stale  contract ;  and  whether  Messrs.  Wright  &  Co.  would  consent  to 
cancel  it  in  that  form,  and  make  a  new  contract  with  the  canal  contrac- 
tors, or  their  agents,  I  am  unable  to  say.  It  would  certainly  be  better 
to  make  as  little  change  as  possible,  as  a  proposition  to  that  ef- 
fect might  induce  Messrs.  Wright  &  Co.  to  suppose  that  the  State, 
by  insisting  on  the  change,  did  it  for  the  purpose  of  escaping  liability. 
But  this  difficulty,  I  think, could  be  avoided  in  this  way:  Let  Governor 
Carlin  authorize  me,  or  some  other  agent  to  cause  the  new  bonds  to  be 
made  at  New  York,  in  sums  varying  from  £100  to  £300,  with  the  inter- 
est payable  semi-annually  on  the  1st  days  of  January  and  July,  and 
changed  from  the  form  of  the  old  bond  so  as  to  express  in  addition  to  the 
faith  of  the  State,  that  the  canal  lands,  &c.,  were  also  pledged  to  secure 
the  ultimate  payments.  These  changes,  Messrs.  Wright  &  Co.  said 
would  be  of  great  advantage  in  making  sales.  Then,  let  the  canal  con- 
tractors receipt  to  the  Governor  for  as  many  of  these  bonds  as  may  be 
agreed  upon,  as  payment  for  so  much  money  on  their  several  contracts. 
I  could  then,  with  the  authority  and  advice  of  Governor  Carlin,  place 
these  bonds  in  the  hands  of  Messrs.  Wright  &  Co.,  and  secure  the  avails, 
as  might  be  directed  for  the  benefit  of  the  contractors.  In  this  way,  the 
Governor  could  secure  the  par  value  of  the  bonds  to  the  State,  in  his 
agreement  with  the  contractors.  In  addition  to  the  £lOrOOO,  we  can, 
according  to  the  contract  already  made,  very  soon  draw  for  £20,000 
more;  and  I  have  no  doubt  that  the  residue  could  be  obtained,  in  sums  to 
suit  the  contractors,  within  a  short  time  thereafter.  I  have  received 
letters  from  London,  recently,  giving  the  most  flattering  account  of  the 
prospect  of  sales  of  our  bonds.  In  a  letter  from  Messrs.  Wright  &,  Co., 
of  the  4th  of  January  they  say  that  they  have  sold  enough  of  the  bonds 
to  reimburse  them  for  the  £10,000  drawn  for,  and  have  a  fair  prospect  of 
making  further  sales  on  more  favorable  terms;  and  urge  the  necessity  of 
sending  over  renewed  bonds,  making  the  interest  payable  semi-annually, 
and  changed  from  £225  to  denominations  varying  from  £100  to  £300* 
They  also  propose  to  take  the  residue  of  the  bonds,  making  $2,500,000,. 
on  the  same  terms.  They  conclude  by  saying  that  the  prejudice  against 
American  securities  is  fast  subsiding,  and  wish  the  altered  bonds  trans- 
mitted as  soon  as  possible.  Mr.  Samuel  Allinson,  agent  of  the  House  of 
Wright  &  Co.  in  a  letter  dated  33  st  January,  says:  "The  price  of  Illinois 
bonds  is  at  present  £95  in  the  £100,  and  I  think  will  very  shortly  run 
up  to  the  full  amount  expressed  on  their  face,  and  I  am  convinced  will  be 
preferred  to  any  other  American  securities.  The  Bank  of  England  has 
just  reduced  the  rate  of  interest  from  six  to  five  per  cent.;  and  a  still  fur- 
ther reduction  is  expected;"  and  concludes  by  urging  me  to  procure 
and  forward  the  altered  bonds,  changed  as  above  described.  In  a  subse- 
quent letter  dated  18th  February,  (the  last  received,)  Mr.  Allinson  says: 
"Illinois  l»onds  are  in  good  demand,  and  I  think  we  could  dispose  of  your 
$2,500,000  easily;"  andngain  requests  that  renewed  bonds  may  be  sent 
without  delay.  Thus  you  have  the  prospect  held  out  at  London.  I  was 
just  preparing  a  letter  to  Messrs.  Wright  &  Co.  to  cancel  the  contract 
made  with  them,  under  instructions  from  the  Governor,  which  I  intended1 


21  [369J 

to  have  sent  by  the  "British  Queen,"  which  leaves  New  York  the  first  of 
April;  but  will  not  send  it  until  I  hear  from  you  on  the  subject  of  the  pro- 
posed arrangement.  If  the  Governor  should  be  unwilling  to  remodel  and 
retain  the  agreement  as  a.  State  arrangement,  and  the  contractors  should 
desire  to  avail  themselves  of  the  benefit  of  the  contract,  by  substituting 
their  names  for  that  of  the  State,  I  will  aid  them  to  the  extent  of  mj 
ability;  but  doubt  the  success  of  such  a  proposition,  and  hope  the  Govern- 
or mav  consent  to  the  course  I  have  suggested. 

I  am,  very  respectfully, 

Your  obedient  servant, 

RICHARD  M.  YOUNG. 
WILLIAM  B.  OGDEN,  Esq. 

P.  S.  At  the  date  of  Mr.  Allinson's  last  letter,  they  had  not  heard  in 
London  any  thing  of  the  doings  of  our  Legislature  at  the  late  special 
session. 


No.  10.  : 

Governor  Carlin  to  R.  M.   Young  and  John  Reynolds. 

QUINCY,  ILLINOIS,  March  12,  1840, 

GENTLEMEN:  A  committee  of  contractors  upon  the  Illinois  and  Michi- 
gan canal  have  visited  me,  and  propose  to  receive  their  estimates  as  they 
become  due,  from  time  to  time,  in  State  bonds,  provided  money  cannot 
be  procured  to  pay  those  estimates.  I  am  exceedingly  unwilling  to  pay 
them  in  bonds;  but  it  would  seem  to  be  very  hard  treatment  to  refuse  to- 
do  so,  as  such  refusal  would  compel  them  to  abandon  their  contracts,  and 
would  absolutely  bankrupt  and  ruin  a  great  portion  of  the  contractors. 
They  further  propose,  in  case  bonds  are  paid  to  them  at  par,  to  place 
said  bonds  in  the  hands  of  an  agent  to  sell  for  them,  in  the  east,  in 
large  parcels,  so  as  to  prevent  them  being  hawked  about  in  small 
quantities  to  the  injury  of  the  credit  of  the  State.  They  further  pro- 
pose and  request  (with  a  view  of  providing  certain  assurance  of  money) 
me  to  place  in  the  hands  of  the  canal  commissioners  bonds  equal  to  the 
probable  amount  of  work  to  be  done  during  the  season,  from  the  1st  of 
March  instant — altogether  about  $1,200,000;  with  instruction  to  sell  the 
same  at  discretion,  on  such  terms  only,  however,  as  will  secure  their  legal 
par  value  to  the  State;  and  the  proceeds  of  such  sale, or  sales,  to  apply 
to  the  current  expenses  of  the  canal. 

Believing  it  to  boa  duty  devolving  upon  me  to  strictly  preserve  the 
good  faith  of  the  State  toward  her  creditors,  I  have  consented  to  the  fore- 
going propositions;  but  to  avoid  any  difficulty  that  may  possibly  grow 
out  of  such  proceeding,  I  have  to  request  of  you  and  Judge  Reynolds  to 


use  your  utmost  exertions,  to  make  a  sale  of  bonds,  in  some  of  the  eas- 
tern banks,  to  the  amount  of  $1,200,000,  payable,  in  instalments  of  $200,- 
000,  on  the  1st  of  Mny,  July,  September,  November,  &c.,  but,  if  possi- 
ble, procure  $500,000  on  the  first  of  May,  as  the  debts  of  the  canal, 
for  which  scrip  has  been  issued  prior  to  the  1st  of  March  instant,  is 
probably  near  $300,000. 

I  think  I  informed  you  in  one  of  my  preceding  letters,  thnt  the  Legis- 
lature passed  a  law  providing  for  the  payment  of  interest  on  loans  for 
canal  purposes  semi-annually.  The  contractors  express  great  anxiety 
to  secure  your  contract  with  Messrs.  Wright  &  Co.;  but  I  informed  them 
that  I  had  advised  you  to  cause  the  contract  to  be  cancelled,  and  the 
bonds  withdrawn;  which  I  presume  you  will  have  done  before  this  reaches 
you.  I  cannot  however  now  approve  that  contract,  as  the  last  Legisla- 
ture was  altogether  opposed  to  it;  but  I,  notwithstanding,  believe  it  is 
better,  on  the  score  of  expediency,  than  can  be  done  elsewhere,  and 
would  therefore  be  glad  if  the  contractors  could  avail  themselves  of  it; 
but  on  reflection,  I  cannot  see  how  it  is  possible,  unless  they  should  first 
avail  themselves  of  the  bonds,  and  enter  into  the  contract  through  an 
agent  of  their  own.  Please  write  me  what  the  preseut  prospects  are  in 
relation  to  the  sale  of  bonds  in  the  eastern  cities. 

The  act  of  the  last  session,  allowing  five  dollars  per  day  to  agents  em- 
ployed to  negotiate  loans,  I  am  inclined  to  construe  differently  since  I 
wrote  you.  The  act  allows  five  dollars  per  day,  where  no  specific  bar- 
gain was  made  by  me.  In  the  case  with  each  of  you,  I  made  a  specific 
bargain  that  you  were  to  be  furnished  a  sufficient  sum  to  bear  your  ex- 
penses, and  were  to  submit  to  such  allowance  as  the  Legislature  might 
agree  upon  as  compensation  for  your  services.  The  Legislature  surely 
meant  to  pay  you  five  dollars  per  day,  overhand  above  your  expenses. 
At  all  events,  I  feel  free  to  do  so,  under  the  authority  of  that  act;  and 
shiT.ll  therefore,  authorize  each  of  you  to  make  an  account  of  your  expenses, 
while  engaged  in  that  service,  as  well  as  the  number  of  days  employed 
and  forward  it  to  me,  and  I  will  direct  all  arrears  to  be  paid  to  you  out 
of  the  canal  fund. 

An  act  passed  the  last  session  requiring  the  canal  commissioners  to 
sell  as  much  of  the  canal  lands  as  was  necessary  tp  pay  the  interest  on 
canal  debts;  which,  I  suppose,  is  the  only  legitimate  source  from  whence 
the  interest  is  to  be  derived. 

If  any  negotiation  is  made  by  you  for  canal  purposes,  please  ad- 
vise the  canal  commissioners  immediately. 

With  much  esteem,  your  friend, 

THOS.  CARLIN. 


P.  S. — Two  drafts  of  $16,000,  each,  drawn  by  me  upon  the  Onondaga 
Bank,  (being  the  two  first  instalments  due  on  account  of  a  loan  or  nego- 
tiation made  by  Governor  Reynolds  and  General  Rawlings  with  the 
Poughkecpsie  Locomotive  Fire  Engine  Company,  for  $128,000,)  have 
been  protested  by  said  bank.  This  loan  has  been  transferred  to  the  Bank 
of  Illinois;  and  that  bank  has  made  advances  to  the  amount  of  $80,000,) 
which  have  been  expended  upon  the  State  House.  This  subject  I 


23  [371] 

referred  to  the  last  Legislature,  and  recommended  the  indemnity  of  the 
Bank  of  Illinois;  but  no  action  was  had  in  reference  to  it.  I  pre.^ume 
the  company  will'not  pay  for  the  bonds,  but  was  informed  by  the  cashier 
of  the  Bank  of  Illinois,  that  they  expressed  a  desire  to  return  the  bonds; 
which,  I  suppose,  had  better  be  acceded  to.  But  as  the  instalments 
were  transferred  to  the  Bank  of  Illinois,  it  may  be  proper  to  secure  the 
consent  of  that  bank  to  such  arrangement,  particularly  as  the  State  is 
not  in  possession  of  funds  to  indemnify  thut  bank,  at  the  present  time, 
for  the  advances  which  it  has  made.  I  have  to  request  Governor  Rey- 
nolds to  ascertain  whether  there  is  any  certainty  of  getting  the  money 
from  said  company,  and  if  not,  to  recover  the  bo'nds  if  possible.  In  that 
event,  the  company  ought  to  pay  for  engraving  the  bonds.  In  case  the 
negotiation  is  cancelled,  I  wish  you  to  sell  that  amount  of  bonds,  to  ena- 
ble the  State  to  complete  the  State  House,  as  contemplated  by  the  law 
authorizing  the  loan.  I  will  write  to  the  Bank  of  Illinois  to  advise  you 
of  their  consent  to  cancelling  the  contract. 

With  great  esteem,  your  friend, 

THOS.  CARLltf. 
Hon.  R.  M.  YOUNG  and 
JOHN  REYNOLDS. 


No.  11. 

GOT.  Carlin  to  R.  M.  Young  and  John  Reynolds. 

QUINCY,  ILLINOIS,  March  2G,  1840. 

GENTLEMEN:  I  omitted,  in  my  letter  to  you  of  the  12th  instant,  to  re- 
quest you  to  place  in  some  bank,  in  New  York  or  Philadelphia,  $1,200,000 
of  the  canal  bonds,  which  you  have  in  possession,  subject  to  the  order  of 
the  board  of  canal  commissioners;  provided,  however,  you  have  not  or 
cannot  sell  bonds  to  that  amount.  I  would  much  prefer  your  selling  the 
bonds,  in  case  a  sale  can  be  made  at  par.  In  one  of  my  former  letters  I 
enjoined  upon  you  not  to  sell  bonds  at  less  than  par  in  the  currency 
where  the  sale  was  made;  but,  under  existing  circumstances,  I  have  now 
concluded  to  take  the  responsibility  of  authorizing  you  to  sell  bomls  to 
the  amount  of  $l,k200,000,  provided  you  can  realize  par  in  Illinois  bank 
paper.  A  sale  at  that  rate  would  be  as  favorable  to  the  State,  as  to  pay 
that  amount  of  bonds  to  contractors  at  Chicago,  and  would  obviate  any 
depreciation  of  bonds  which  might  grow  out  of  the  payment  of  th«  m  to 
contractors.  In  case,  however,  you  cannot  sell,  please  to  place  the  rbove 
amount  in  some  safe  bank,  subject  to  the  order  of  the  board  of  cannl  com- 
missioners; and  give  them  notice  thereof  as  soon  as  you  have  determined 
what  bank  you  will  place  them  in,  as  it  may  be  important  for  them  to  know 
as  early  as  possible.  I  also  mentioned,  in  my  last  letter,  that  I  wished 
you  to  sell  as  many  bonds  as  are  necessary  to  pay  the  interest  th:it  will 
become  due  on  the  1st  of  July  next,  on  accouut  of  canal  loans;  but  in 


[372]  24 

the  same  letter  countermanded  it,  in  consequence  of  an  act  of  the  last 
Legislature  requiring  the  canal  commissioners  to  sell  as  much  of  the  canal 
lands  as  would  be  necessary  to  pay  the  accruing  interest  upon  canal 
debts.  I  am,  however,  informed  by  Gen.  Thornton,  that  money  cannot 
be  realized  from  the  sale  of  canal  lands  in  sufficient  amount  to  pay  the 
interest  that  will  then  become  due;  therefore,  in  order  that  the  faith  of  the 
State  may  be  fully  preserved,  I  consider  it  my  duty,  if  possible,  to  cause 
a  sufficient  additional  amount  of  bonds  to  be  sold,  to  enable  the  State  to 
punctually  pay  the  interest.  Be  pleased  to  use  every  exertion  to  sell  bonds 
for  that  purpose,  and,  in  case  you  should  succeed,  advise  the  canal  com- 
missioners of  it  immediately. 

Your  friend, 

THOS.  CARLIN. 
Hon.  Messrs.  YOUNG  and  REYNOLDS. 


No.  12. 
Richard  M.  Young  to  Gov.  Carlin. 

WASHINGTON  CITY,  May  15, 1840. 

DEAR  SIR:  After  the  joint  letter  of  Governor  Reynolds  and  myself, 
from  New  York,  in  which  we  informed  you  of  the  impossibility  of  mak- 
ing sales  of  canal  bonds  to  pay  interest,  &c.  agreeably  to  your  letter  of 
instructions  to  us  on  that  subject,  I  called  to  see  Thomas  Dunlap,  Esq. 
president  of  the  United  States  Bank  at  Philadelphia,  on  my  return  to 
Washington  city,  and  advised  him  of  our  failure,  and  the  probable  inabi- 
lity of  the  State  to  pay  the  accruing  July  interest,  which  will  fall  due  in 
London  on  the  $1,000,000  of  canal  bonds  sold  to  that  institution  by 
Messrs.  Rawlings  and  Reynolds  last  spring.  That  interest  is  stipulated 
to  bo  paid  at  the  agency  of  the  Bank  of  the  United  States  in  London, 
and  amounts  to  $60,000.  Mr.  Dunlap  says  that  his  bank  is  much  pressed 
to  m-jet  its  liabilities  in  London,  and  that  he  cannot,  without  much  incon- 
venience, make  an  advance  to  meet  this  interest;  but  that  if  the  State 
should  fail  to  provide  the  means,  he  will  see  to  the  payment,  rather  than 
suffer  the  bonds  to  become  discredited  in  the  London  market;  as  would 
inevitably  be  the  case,  not  only  there,  but  also  in  the  home  market,  upon 
the  happening  of  such  a  contingency.  In  that  event  I  think  we  can  pre- 
vail upon  him  to  take  bonds  upon  the  same  terms  on  which  the  $1,000,000 
wero  sold,  for  the  amount  of  interest  it  may  become  necessary  for  him 
to  advance  in  London.  Besides  the  $60,000  payable  in  London  on  the 
sterling  bonds  sold  to  the  Bank  of  the  United  Stales,  there  is  a  consider- 
able sum  due  at  the  same  time  on  the  dollar  bonds,  payable  in  New  York. 
This,  it  is  the  duty  of  the  canal  commissioners  to  pay;  and  as  no  provi- 
sional arrangement  could  be  made  for  its  payment,  with  the  means  placed 
at  our  disposal  by  your  letter  of  instruction,  it  is  important  that  the  amount 
should  be  raised  in  some  other  way,  and  that  speedily,  as  otherwise  the 
cred't  of  our  stocks  will  inevitably  go  down,  and  with  it,  necessarily,  the 
credit  of  the  State.  We  mentioned  in  our  letter  from  New  York,  that 


25  [373] 

during  our  stay  in  that  city  a  parcel  of  our  bonds  Were  offered  at  the 
"stock  board"  at  70  cents  to  the  dollar,  without  a  purchaser;  and  that  a 
lot  of  Indiana  bonds  were  sold  at  the  same  time  at  65  cents  to  the  dollar. 
What  will  be  the  scale  of  depreciation  upon  a  failure  to  meet  the  payment 
of  the  iiterest  punctually,  no  one  can  foresee.  But  one  thing  is  certain: 
that  such  a  result  would  be  injurious  in  the  extreme,  if  not  wholly  ruinous 
to  the  future  credit  and  prospects  of  our  State. 

While  at  New  York,  the  citizens  from  Illinois  then  present  in  that  city, 
consisting  of  Governor  Duncan,  Colonel  Mather,  Doctor  Barrett,  Gover- 
nor Reynolds,  and  my  sell,  had  frequent  conversations  on  the  subject  of 
our  State  difficulties,  and  unanimously  agreed  that  our  only  hope  depends 
upon  the  execution,  in  good  faith,  on  our  part,  of  the  two  contracts  with 
Messrs.  Wright  &  Co.  of  London,  If  these  contracts  should  be  aban- 
doned, what  are  our  other  resources  to  meet  the  accruing  liabilities  of 
the  State  at  home  and  abroad?  We  see  none — nothing  before  us  but 
mist,  and  gloom,  and  hopeless  bankruptcy.  The  canal  lands  cannot  be 
disposed  oi  wilhout  great  sacrifice,  if  at  all;  and  it  will  not  do  to  tax  the 
people  so  heavily  as  would  be  necessary,  if  uniided  by  other  and  very 
considerable  means.  To  think  of  making  further  sales  of  bonds  at  par, 
either  in  Europe  or  in  this  country,  under  existing  circumstances,  (which 
are  daily 'becoming  worse  and  worse,)  is  a  fallacious  calculation,  if,  in- 
deed, such  an  idea  should  at  this  time  be  entertained  by  those  whose  duty 
it  is  to  provide  for  these  and  other  exigencies  of  the  State. 

These  contracts,  in  our  judgment,  may  yet  be  consummated,  provided 
you  should,  on  a  reconsideration  of  your  former  opinions,  consent  that 
renewed  bonds,  with  the  interest  payable  semi-annually,  to  the  extent  of 
f  2,900,000,  should  be  executed,  and  forwarded  to  Messrs.  Wright  &  Co. 
on  the  canal  contract,  and  for  the  residue  of  the  contract  made  by  Messrs. 
Rawlings  &  Oakley.  In  regard  to  the  contract  negotiated  by  us  with 
Messrs.  Wright  &  Co.  Colonel  Mather  has  agreed,  on  his  own  responsi- 
bility as  to  expense,  to  have  the  renewed  bonds  engraved,  and  to  take 
them  out  with  him  to  Illinois,  or  to  see  that  they  are  forwarded  as  soon 
as  they  can  be  made  ready.  You  can  then  exercise  your  discretion, with 
all  the  information  which  may  be  in  your  possession,  whether  you  will 
execute  them  or  not,  and  give  instructions  tor  the  execution  of  the  con- 
tract; it  being  our  opinion  that  there  is  nothing  in  the  legislation  of  the 
late  General  Assembly  to  prevent  such  a  course,  if  you  should  consider  it 
expedient.  Two-thirds  of  the  new  bonds  will  be  for  £300  sterling  each, 
and  the  residue  of  the  denomination  of  £100  each;  Mr.  Wright  being  of 
opinion  that  they  would  be  much  more  saleable  than  if  executed  in  the 
old  form.  We  were  informed  by  Colonel  Mather  that  Gen.  Thornton 
had  sold  only  $100,000  of  the  8500,000  of  bonds  placed  in  his  hands  for 
sale  within  the  limits  of  the  State;  so  that  (with  the  $400,000  in  his  hands 
unsold,  the  $1,000,000  in  the  hands  of  Messrs.  Wright  &  Co.  which 
would  be  withdrawn,  the  $1,200,000  deposited  with  Messrs.  Nevins, 
Townsend  &  Co.  in  New  York,  and  $300,000  deposited  with  the  Bank 
of  the  United  States,  in  Philadelphia — all  of  which,  we  suppose,  would 
be  taken  up  and  cancelled,)  the  amount  of  the  new  bonds  would  be 
$2,900,000,  to  make  up  the  $4,000,00t)  authorized  by  the  laws  of  the 
State.  Very  respectfully,  &c. 

RICHARD  M.  YOUNG. 
His  Excellency,  THOMAS  CARLIN,  Governor  of  Illinois. 


[374]  26 

No.  13. 
Got?.  Carlin  to  R.  M.  Young. 

QUINCY,  ILLINOIS,  May  1,  1840,. 

DEAR  SIR:  1  have  concluded  to  confirm  your  sale  of  $1,000,000  canal 
bonds  to  Messrs.  Wright  &  Co.  of  London:  1st.  Because  I  have  no  doubt 
that  it  is  the  best  and  most  favorable  sale  that  can  probably  be  effected 
to  enable  the  State  to  meet  the  present  and  accruing  liabilities  on  account 
of  the  canal  throughout  the  year;  the  present  indebtedness  to  the  hold- 
ers of  scrip,  and  to  contractors,  amounting  to  near  $400,000.  These 
must  be  provided  for,  and  the  accru:ng  interest  to  be  paid  on  the  1st  of 
July  and  January  next.  The  last  Legislature,  by  an  act  passed  on  the 
1st  of  February  last,  required  the  canal  commissioners  to  sell  as  much  of 
the  canal  lands  and  lots  as  would  be  necessary  to  pay  the  interest  on 
canal  debts  for  the  present  year;  but  General  Thornton  tells  me  that  it 
would  be  impracticable  to  raise  the  money  from  that  source.  And  2dly. 
Because  the  action  of  the  last  Legislature  failed  to  repudiate  your  con- 
tract, although  it  was  much  animadverted  upon;  and  therefore  removes 
responsibility,  to  a  great  extent,  on  my  part.  1  cannot,  however,  persuade 
myselt  that  it  is  a  sale  at  par,  according  to  the  letter  of  the  law;  but  I  do 
believe  it  is  a  par  sale,  according  to  the  meaning  and  intention  of  the  Le- 
gislature at  the  time  it  was  enacted;  knowing,  as  I  do,  that  they  were 
informed  that  the  price  of  Illinois  stocks  at  that  time  in  Europe  was  93 
to  the  100;  and  by  estimating  the  difference  of  exchange  at  10  percent. 
in  favor  of  London,  it  was  contended  that  3  per  cent,  premium  would  be 
realized  by  a  sale  at  that  rate.  Therefore,  the  sale  of  $4,000,000  canal 
bonds  was  anticipated  to  be  made  in  Europe,  as  the  phraseology  of  the  act 
itself  will  demonstrate;  and  if  a  sale  at  93  to  the  100  at  that  time  would 
net  a  premium  of  3  per  cent,  surely  a  sale  at  the  same  time  at  90  to  the 
100  would  have  yielded  par. 

Whatever  may  be  my  private  opinion  as  to  the  utility  of  contracting 
those  debts,  1  think  expediency  at  present  demands  the  confirmation  of 
your  sale  to  Messrs.  Wright  &  Co.  Therefore,  if  the  money  can  be  real- 
ized to  meet  the  demands  upon  the  canal  throughout  the  present  year,  I 
request  you  to  close  and  confirm  the  contract;  but  if  money  cannot  be 
realized  from  that  negotiation  to  meet  the  present  and  accruing  liabilities 
for  this  year,  then,  and  in  that  case,  I  would  advise  and  recommend  can- 
celling the  contract,  and  a  withdrawal  of  the  bonds;  because,  should  the 
payment  of  the  money  be  postponed  until  next  year,  the  Legislature, 
before  that  time,  will  have  been  convened,  and  an  opportunity  afforded 
for  such  action  as  their  wisdom  may  dictate. 

With  sentiments  of  the  highest  regard,  your  friend, 

THO.  CARLIN. 

Hon.  RICHARD  M.  YOUNG. 


P.  S. — I  presume  Gen.  Thornton  will  arrive  at  Washington  by  the  time 
this  reaches  you,  on  his  agency  for  the  canal  contractors,  for  the  purpose 
of  selling  bonds,  which  necessity  and  a  sense  of  justice  compelled  me  to 

.*JonTj^ 


27  [375] 

place  in  the  hands  of  the  canal  commissioners,  to  meet  the  wants  and 
liabilities  of  the  State  in  the  absence  of  money.  I  deprecate  a  forced  sale 
of  those  bonds  by  the  contractors,  (although  they  take  them  at  par  from 
the  State,)  both  on  account  of  the  loss  to  be  sustained-  by  the  contractors 
themselves,  and  the  effect  and  pernicious  influence  that  it  will  have  upon 
the  credit  and  character  of  our  State  stocks  in  future.  This,  sir,  has  had 
no  small  agency  in  determining  me  to  confirm  your  sale  of  $1,000,000  to 
Messrs.  Wright  &  Co.  General  Thornton  expressed  an  intention,  when 
here,  in  case  the  money  was  realized  from  your  contract,  to  sell  an  ad- 
ditional amount  of  bonds  on  account. of  the  contractors,  even  at  reduced 
prices;  alleging  that  $1,000,000  would  be  unequal  to  the  present  liabili- 
ties, and  keeping  the  work  on  the  canal  in  progress  throughout  the  year. 
I  have  reflected  upon  this  matter  since  his  departure,  and  have  arrived  at 
the  conclusion  that  it  would  be  infinitely  better  to  curtail  the  work  upon 
the  canal,  to  the  limits  of  $'1,000,000,  than  to  sell  any  of  the  bonds  below 
par;  and  request  you  to  show  him  this,  and  I  give  it  as  my  deliberate  and 
decided  recommendation.  The  success  and  ultimate  completion  of  the 
canal  depend  less  upon  the  amount  of  work  done  this  year,  than  upon 
keeping  the  credit  oi  the  bonds  inviolate  at  par. 

T.  C. 


No.  14. 
Richard  M.  Young  to  Gov.  Carlin. 

SENATE  CHAMBER, 
Washington  City,  May  20,  1840, 

DEAR  SIR:  Your  letter  of  the  1st  of  May,  approving  of  the  contract 
made  with  Messrs.  Wright  &  Co.  of  London,  for  $1,000,000  of  bonds  of 
Illinois  and  Michigan  canal  stock,  provided  the  money  can  be  realized  for 
the  purposes  of  the  canal  during  the  current  year,  has  been  received  j 
and  we  have  hastened  to  inform  Messrs.  Wright  &Co.(by  the  steamship 
British  Queen,  which  sails  on  the  1st  of  June  instant)  of  the  proposed 
alteration,  and  of  your  desire  that  the  contract  should  be  cancelled,  and 
the  bonds  withdrawn,  if  the  money  cannot  be  promised  within  the  year. 
I  send  herewith  a  copy  of  our  letter  to  Messrs.  Wright  &  Co.  to  which  I 
beg  leave  to  refer  for  the  subject-matter  of  its  contents. 

I  regret  (if  it  is  intended  to  avail  ourselves  of  this  contract,)  that  any 
limitation  should  have  been  imposed  in  regard  to  the  time  of  payment,  aa 
I  very  much  fear  Mr.  Wright  will  decline  making  any  promise  inconsis- 
tent with  the  agreement.  To  give  you  an  idea  of  his  feelings  in  respect 
to  any  movement  which  savors  of  repudiation,  or  a  disposition  tending  to 
a  non-compliance  with  existing  agreements,  entered  into,  as  he  supposed, 
in  good  faith,  and  by  agents  duly  authorized  by  law,  I  send  you  the  copy 
of  a  letter  from  him,  which  was  politely  furnished  me  by  Thomas  Dun- 
lap,  Esq.  President  of  the  Bank  of  the  United  States. 


[376]  28 

General  Thornton  was  exceedingly  anxious  that  I  should  pay  the  New 
York  interest,  amounting  to  $45,00'\out  of  the  £10,000  heretofore  ad- 
vanced by  Mr.  Wright,  and  draw  for  the  £'?0,000  promised  on  the  15th 
of  July,  to  enable  him  to  pay  the  interest  falling  due  in  London  on  the 
first  Monday  in  July,  amounting  to  about  $65,0(JO.  At  first,  I  was  dis- 
posed to  aid  him  in  providing  for  these  payments,  and  went  to  Philadel- 
phia to  assist  him  to  make  the  necessary  arrangements  with  the  Bank  of 
the  United  States;  but  not  having  succeeded  there  as  we  anticipated,  I  re- 
turned to  Washington,  and,  on  further  reflection  and  advice  with  Gov- 
ernor Reynolds  and  Mr.  Webster  declined  doing  any  thing  further  in  the 
matter.  I  send  you  a  copy  of  my  letter  to  General  Thornton,  now  at 
New  York;  which  will  explain  the  reasons  which  decided  me  to  adopt 
this  course. 

If  it  is  desirable  to  carry  out  our  contract  with  Wright  &  Co.  in  good 
faith,  my  present  impression  is,  that  it  will  be  essential  for  you  to  with- 
draw the  limitation  contained  in  your  letter  of  approval  of  the  1st  of  May, 
so  as  to  leave  the  payments  to  be  made  according  to  the  terms  of  the 
agreement.  In  respect  to  the  substitution  of  new  bonds,  providing  for 
the  payment  of  the  interest  semi-annually,  you  say  nothing  in  your  let- 
ter, or  in  any  of  your  correspondence  with  General  Thornton.  General 
T.  says  that  such  was  your  intention,  and  that  he  will  undertake  to  pro- 
cure and  forward  the  new  bonds  to  Mr.  Wrigh/.  This  will  be  necessary 
to  render  that  contract  effectual,  as  the  old  bonds  are  admitted  on  all 
hands  to  be  unsaleable  with  the  interest  payable  but  once  a  year. 

I  am  informed  that  the  accounts  brought  out  by  the  "British  Queen," 
from  London,  represent  American  stocks,  with  but  few  exceptions  in  a 
state  of  very  great  depression.  Arkansas  six  per  cent,  sterling  stock 
sold  a  few  days  ago,  in  New  York,  at  56  to  the  100;  and  although  money 
is  plenty  there,  it  cannot  be  obtained  for  our  western  and  southwestern 
State  securities. 

Very  respectfully,  your  friend, 

RICHARD  M.  YOUNG. 
His  Excellency,  THOMAS  CARLIN, 

Governor  of  Illinois. 


No.  15. 

R.  M.   Young  to  General  Thornton* 

SENATE  CHAMBER. 
Washington  City,  May  25,  1840, 

DEAR  Sm:  Since  my  return  from  Philadelphia,  I  have  consulted  with 
Governor  Reynolds  on  the  subject  of  providing  for  the  interest  on  our 
canal  bonds  at  New  York  and  London.  He  is  altogether  unwilling 
to  make  such  an  appropriation  of  the  £30,000,  or  any  portion  of  it, 
until  it  is  known  that  Messrs.  Wright  &  Co.  will  accept  the  condition 
imposed  by  Governor  Carlin,  in  his  letter  of  approval  the  first  of  May 


25  [377J 

and  especially  as  the  Governor  did  not  in  that  letter,  request  us  to  assist 
you  in  payment  of  the  interest.  I  also  mentioned  to  him  the  guaranty 
offered  by  Colonel  Mather,  as  president  of  the  State  B;ink  of  Illinois,  for 
the  reimbursement  of  the  $45,000  proposed  to  be  paid  in  New  York. 
He  s.jys  he  cannot  consent  to  any  such  arrangement,  as  he  is  unwilling 
to  assume  responsibility  without  express  authority  from  the  Governor. 
Without  his  consent,  1  do  n>t  feel  authorized  to  act;  and  must  therefore 
decline,  for  the  present,  doing  any  thing  further  in  the  matter.  It  ap- 
pears to  me  upon  much  reflection,  that  it  would  be  better  to  inform  Mr. 
Wright  of  the  approval  of  our  contract  by  the  Governor,  with  the  circum- 
stances attending  that  approval,  and  at  the  same  time  to  hold  ourselves  in  a 
position  to  cancel  the  contract,  by  refunding  the  £10.000  drawn,  and 
asking  for  a  return  of  the  $ltOOO,OuO  of  bonds,  provided  he  is  unwilling 
to  promise  the  money  within  the  current  year.  It  would  unquestiona- 
bly be  better  to  keep  this  contract,  for  the  present,  separate  and  .  istinct 
from  all  other  transactions,  until  we  can  close  it  up  in  some  way,  and 
surrender  our  agencies. 

1  do  deplore  exceedingly  the  present  condition  of  things,  and  s?e  no- 
thing but  mist  and  gloom  in  the  prospective;  and  regret  exceedingly  that 
the  last  legislature  did  not  do  something  effectual  to  place  the  credit  and 
integrity  of  the  State  on  some  substantial  basis.  The  July  interest  should, 
at  all  events  have  been  provided  for  with  certainty,  and  not  left  to  de- 
pend on  remote  probabilities. 

We  will  send  our  letter,  with  its  enclosures  to  Messrs.  Wright  &  Co. 
by  the  British  Queen,  which  sails  on  Monday  next,  and  ask  the  favor  of 
you  to  take  out  a  duplicate:  and  will  lose  no  time  in  making  our  contract 
available  to  the  State,  as  soon  as  Mr.  Wright's  acceptance  of  the  new 
condition  proposed  in  the  Governors  letter  shall  have  been  communicated 
to  us. 

Before  writing  this  morning,  Governor  Reynolds  and  myself  advised 
with  several  gentlemen  here,  in  whose  judgment  we  repose  great  confi- 
dence, as  to  ttie  course  we  ought  to  pursue  in  the  present  emergency,  al- 
ter stating  the  difficulties  with  which  you  were  surrounded,  and  the 
guaranty  offbred  by  Colonel  Mather,  as  president  of  the  State  Bank,  for 
the  reimbursement  of  the  New  York  interest;  and  they  advise  us  a- 
gainst  all  expedients,  and  say  that  it  is  our  duty,  both  as  it  regards  the  in- 
terest of  the  State,  and  as  matter  of  good  faith  towards  Messrs.  Wright 
&  Co.  to  refrain  from  doing  any  thing  whatever  under  our  contract,  un- 
til we  hear  from  them,  and  have  their  approval  of  the  change  proposed 
by  the  Governor;  and  at  the  same  time  to  hold  ourselves  in  a  position  to 
cancel  the  contract  by  refunding  the  £10,000,  and  asking  for  a  return 
of  the  bonds,  if  Messrs.  Wright  &,  Co.  after  a  consideration  of  all  the  cir- 
cumstances, should  be  unwilling  to  promise  the  money  within  the  current 
year. 

Very  respectfully, 

Your  obedient  servant, 

RICHARD  M.  YOUNG. 
General   WILL.IA.H  F.  THORNTON, 

City  of  New  York. 


[378]  26 

No.  1C. 

R.  M.   Young  and  John  Reynold?  to  John   Wright  $  Co. 

WASHINGTON  CITY,  May  26,  1840. 

DEAR  SIR:  Your  esteemed  favors  of  the  4th  and  23d  of  January,  and 
18th  of  March,  with  copies  of  letters  of  remonstrance  from  yourself  and 
Messrs.  Thompson  &  Form  an,  to  his  Excellency,  Thomas  Carlin,  Gov- 
ernor of  Illinois,  and  the  copy  of  the  letter  from  Messrs.  Few  &  Co.  to 
Mr.  Blatchford,  have  been  received  and  duly  considered.    After  the  letter 
of  Mr.  Young  of  the  30th  of  November,  in  which  he  informed  you   that 
Governor  Carlin  had  issued  his  proclamation  convening  the  Illinois  Legis- 
lature on  the  first  Monday  in  December  following,  and  that  his  attention, 
and,  through  him,  the  attention  of  the  Legislature,  had  been  directed  to 
the  necessity  of  changing  the  denomination  of  the  bonds   from  £^25  to 
sums  of  £100  and  £300,  and  the  still  greater  necessity  of  providing  for 
the  payment  of  the  interest  semi-annually.  we  waited  for   the  action   of 
the  Legislature  to  enable  us  to  advise  you  understandingly  as  to  the  future 
operations  connected  with  our  negotiation.     This,    with   the  subsequent 
portion  of  this  letter,  will  account  for  our  delay.     At  the  commencement 
of  the  session  of  the  General  Assembly,  Governor  Carlin    submitted  our 
contract  for  the  approval  or  disapproval  of  the  Legislature.     We  send 
you  herewith  the  reports  of  the  majority  and  minority  of  the  Committee 
on  Finance,  without  comment;  suffice  it  to  say,  that  neither  report    was, 
in  the  end,  adopted.     After  the  adjournment    of  the  Legislature,    the 
Governor  was  at  first  inclined  to  the  opinion,  that,   as  the  contract  was 
not  formally  ratified,  he  could  not  approve  it  with  propriety;  and  hence 
the  new  bonds,  with  semi-annual  interest,  could  not  be  procured  to  make 
the  contract  effectual  in  your  hands,  it  being  the    general   understanding 
that  the  old  bonds  would  be  unsaleable  by  reason  of  the  interest  being 
payable  but  once  a  year.  Thus  matters  remained  fora  time;  the  Govern- 
or hesitating,  and  the  contractors  on  the  canal  anxious   that  something 
should  be  done  for  their  relief.     We  have  at  length  received  an   official 
letter  from  the  Governor,  dated  May  1,  1840,  (a  copy  of  which    we  en- 
close to  you,)  and  the  copv  of  a  letter  addressed  to  General  William   F. 
Thornton,  dated  April  30, 1840.  (which  we  also  enclose,)  by  which  you  will 
perceive  that  he  has  concluded  to  confirm  our  sale  for  $1.000,000,  the  a- 
mount  of  bonds  left  only  in  your  hands.  We  did  not  ourselves  suppose  there 
was  any  necessity  for  a  formal  approval  of  the  contract  by  the  Legisla- 
ture, as  the  power  to  make  contracts,  under  the  laws  which  governed  our 
action,  had  been  transferred  to  the  agents  to  be  appointed  by  the  Govern- 
or; but,  as  the  contract  contained  a  provision  for  semi-annual  interest,  re- 
quiring legislative  action  and  sanction  to  give  it  effect,  we  think  it   wa» 
very  properly  for  that  purpose  at  least  sulmitted  for  consideration,  inas- 
much as  the  proposed  change  was  not  authorized   by  any  existing  law. 
But,  without  this,  the    contract  was  perfect,  as  all  we   promised  to   do 
was  to  procure,  or  endeavor  to  procure;  and,  in  that  respect,  complied 
with  our  contract  to  the  extent  of  our  engagement.     The  Governor,   we 
are  informed  by  General  Thornton,  has  also  consented  to  the  making  of 


27  [379] 

the  new  bonds,  which  are  now  in  process  of  execution  at  the  engravers 
in  New  York — two-thirds  to  be  of  the  denomination  of  £300,  and  the 
remaining  one-third  £100,  with  interest  payable  semi-annually.  These 
bonds,  when  engraved,  must  be  sent  to  Illinois  for  the  signatures  of  the 
Governor  and  Auditor  of  State,  with  the  great  seal  of  the  State;  and  will 
immediately  thereafter  be  forwarded  to  you,  for  the  purpose  of  being  sub- 
stituted in  place  of  the  old  bonds  now  in  your  possession,  provided  you 
are  willing,  under  all  the  circumstances,  to  carry  the  contract  into  execu- 
tion as  originally  intended.  You  will  see,  from  the  Governor's  letter  of 
May  1,  that  his  approval  of  the  contract  is  accompanied  with  a  provision, 
"that,  if  money  cannot  be  realized  from  that  negotiation  to  meet  the 
present  accruing  liabilities  for  this  year;  then,  and  in  that  case,  I  would 
advise  and  recommend  cancelling  the  contract,  and  a  withdrawal  of  the 
bonds,"  &c.  It  is,  therefore,  for  you  to  judge  whether  the  money  can  be 
promised  for  this  year  or  not.  We  suppose,  if  the  last  instalment  can  be 
drawn  for  at  ninety  days  at  the  close  of  the  year,  which  would  extend  the 
actual  payment  at  London  three  months  beyond  that  time,  it  would 
come  within  the  meaning  of  the  Governor's  instruction,  as  the  money 
could  be  realized  upon  such  a  draft  at  New  York  at  the  close  of  the 
year.  You  will  see  by  the  7th  section,  of  the  act  to  amend  the  several  laws 
in  relation  to  the  Illinois  and  Michigan  canal,  approved,  February  1, 
1840,  (a  copy  of  which  we  also  send  you,)  how  far  provision  is  made  for 
the  payment  of  interest  semi-annually.  We  have  thus  given  you  a  histo- 
ry of  the  difficulties  which  have  been  thrown  in  our  way,  and  which  still 
exist,  in  regard  to  our  contract,  which  we  had  fondly  anticipated  would 
have  been  carried  out  with  interest  and  credit  to  all  the  parties  concern- 
ed. We  saw  no  other  way  of  providing  for  the  exigencies  of  our  State, 
and  feeling  a  deep  interest  in  the  prosecution  and  completion  of  the 
work  upon  our  grand  canal,  we  felt  a  solicitude  that  something  should  be 
done;  and  all  who  were  in  London,  and  acquainted  with  the  depressed 
condition  of  the  money  market  at  that  lime — not  only  there,  but  over 
the  whole  commercial  world — will,  we  are  sure  award  us  the  credit  of 
having  done  the  very  best  that  could  be  done,  and  much  better  than  any 
one  supposed  could  have  been  effected,  under  the  various  embarrassments 
attending  the  money  market  at  home  and  abroad.  How  much  might 
have  been  .realized  in  monej',  under  our  contract  with  you,  if  there  had 
been  no  interruption  to  prevent  its  consummation,  you,  of  course  can 
judge  better  than  we  can.  If  but  little  has  been  accomplished,  you 
surely  are  not  justly  chargeable  with  delinquincy,  when  the  embarrass- 
ments under  which  you  have  labored  shall  be  duly  considered  and  justly 
appreciated.  We  still  hope  you  will  consent  to  carry  out  the  contract  on 
the  terms  proposed  in  the  letter  of  the  Governor  of  the  1st  May.  If  so, 
we  will  furnish  you  with  the  renewed  bonds  as  speedily  as  we  can,  as 
General  Thornton  has  promised  to  see  that  every  thing  is  despatched  in 
that  respect  as  expeditiously  as  possible.  General  T.,  who  will  deliver 
you  this  packet,  and  to  whose  care  the  renewed  bonds  will  be  intrusted, 
assures  us  that  messengers  should  be  provided  to  carry  the  bonds,  for  ex- 
ecution, to  Illinois,  and  back  again  to  New  York,  when  executed,  with 
all  possible  despatch;  to  him  we  beg  leave  to  refer  you  for  such  fur- 
ther  information  on  this  subject  as  may  net  be  afforded  by  the  explana 
tions  contained  herein,  and  accompanying  this  letter.  If  you  should, 


[380]  28 

however,  decline  going  on  with  our  contract,  after  the  explanations  af- 
forded you,  you  will  please  signify  in  what  way  you  would  wish  the  £10,- 
000  already  drawn  to  be  refunded,  and  return  by  some  safe  conveyance, 
the  $1,000,0  Oof  bonds  deposited  with  you,  either  to  the  care  of  Prime, 
Ward  &  King,  or  Nevins,  Townsend  &  Co.,  of  the  city  of  New  York, 
We  have,  up  to  this  time,  refrained  from  drawing  upon  your  house  for 
the  £20,000  authorized  by  your  letter  of  credit  of  the  31st  of  October  last, 
and  which  will  become  payable  in  London  on  the  15th  of  July,  1840,  by 
reason  of  the  beforcmentioned  difficulties.  We  regret  that  the  Governor 
should  have  limited  his  approval  to  the  condition  of  a  change  of  the  agree- 
ment so  as  to  make  the  money  available  during  the  present  year;  but  we, 
nevertheless,  hope  that  you  will  find  yourself  in  a  situation  to  enable  you 
to  comply  with  that  condition  without  inconvenience.  We  should  not, 
of  ourselves,  have  proposed  any  change  affecting  the  original  contract  in 
any  respect  whatever,  being  satisfied  with  the  agreement  as  it  is;  but  as 
the  Governor  evidently  yielded  to  a  supposed  necessity,  with  much  hesi- 
tation and  reluctance,  and  as  we  are  anxions  to  avoid  difficulty,  we 
would  be  gratified  if  you  would  consent  to  the  proposed  alteration,  to 
limit  all  the  payments  within  the  current  year.  Our  Legislature  will 
convene  again  on  the  first  Monday  in  December  next,  when  we  trust 
something  may  be  done  to  place  the  integrity  of  the  State  upon  some 
substantial  basis.  We  will  thank  you  to  favor  us  with  n  reply  to  this 
communication  by  the  earliest  convenient  opportunity,  as  we  are  desi- 
rous so  far  as  we  are  concerned,  to  bring  this  matter  to  a  close  with  the 
least  possible  delay,  with  the  view  of  resigning  our  agencies  as  soon  as 
we  can  do  so  with  propriety. 

We  are,  very  respectfully, 

Your  obedient  servants, 

RICHARD  M.  YOUNG, 
JOHN  REYNOLDS. 
JOHN  WRIGHT,  Esq., 

Covent  Garden,  London. 

P.  S. — The  £10,000  sterling  advanced  by  you  on  my  draft,  in  favor  oi 
the  cashier  of  the  Bank  of  the  United  States,  in  pursuance  of  the  agree- 
ment made  by  me  with  Mr.  Jaudon  in  London,  has  not  been  appropria- 
ted to  any  State  purpose,  and  will  be  retained  until  I  hear  from  you  on 

the  subject. 

R.  M.  YOUNG. 


No.  17.  , 

Messrs.  Reynolds  and  Young  to  John   Wright 

WASHINGTON  CITY,  May  29,  1840. 

DEAR  SIR:  Since  writing  to  you  by  the  British  Queen,  on  the  26ih  of 
the  present  month,  we  have  at  the  request  of  General  William  F.  Thorn- 
ton, of  Illinois,  who  is  the  acting  president  of  the  board  of  commission- 
ers on  the  Illinois  and  Michigan  canal,  ventured  to  make  a  draft  on  you 


29  [3811 

for  the  twenty  thousands  pounds  sterling  authorized  by  your  letter  of 
credit  of  the  31st  of  October,  1839,  to  .assist  General  Thornton  in  pay- 
ing the  interest  on  £'225,000  sterling,  sold  to  Thomas  Dunlap,  Esq.  of 
Philadelphia,  and  which  is  payable  at  the  agency  of  the  Bank  of  the 
United  States  in  London,  on  the  first  Monday  of  July  1840,  and  some  ar- 
rearages clue  the  United  States  Bank  for  interest  heretofore  advanced  in 
Philadelphia,  amounting  to  about  twenty-four  thousand  dollars.  Our 
draft  in  triplicate,  is  dated  23d  May,  1840,  and  payable  to  A.  Lardner, 
Esq.,  acting  cashier  of  the  Bank  of  the  United  States,  and  the  negotia- 
tion is  to  be  made  through  the  agency  of  Mr.  Jaudon,  in  London.  It  is, 
however,  distinctly  understood,  that,  as  Governor  Carlin  of  Illinois  has 
limited  the  approval  of  our  contract  to  the  payment  of  the  money  within 
the  present  year,  and  much  delay  has  been  occasioned  by  the  Legislature 
of  our  State  in  bringing  about  a  consummation  of  our  agreement,  the 
draft  or  bill  before  mentioned  is  drawn  subject  to  your  approval,  without 
being  subject  to  protest  ordamages  fornon-acceptance;  leaving  you  free 
to  refuse  the  bill  and  annul  the  contract,  if  you  should  be  unwilling  under 
all  the  circumstances,  to  carry  it  into  effect.  We  have  attached  a  letter  to 
each  number  of  the  bill,  expressive  of  this  understanding,  with  the  assent  of 
Thomas  Dunlap,  Esq.,  president  of  the  Bank  of  the  United  States,  as  you 
will  see  by  his  own  signature  on  the  same  sheet  of  paper,  in  his  note  to 
Mr.  Jaudon,  dated  May  23,  1810,  which  is  also  the  date  of  our  letter  ac- 
companying the  bill.  The  reason  why  the  date  of  the  bill  (which  is  the 
23d  of  May)  does  not  correspond  with  the  date  of  this  our  letter  of  advice 
of  to-day,  is  because  wo  had  these  bills  made  out  several  days  ago  at 
Philadelphia,  and  haH  concluded,  when  we  wrote  you  by  the  British 
Queen  not  to  make  any  use  of  them.  But  as  we  have  since  changed  our 
minds  upon  the  subject,  and  being  now  in  a  situation  to  place  you  in  pos- 
session of  the  renewed  bonds,  through  General  Thornton,  in  a  very 
short  time,  we  hope  it  will  suit  you  to  goon  with  the  agreement,  and  that 
you  will  find  it  convenient  to  promise  the  money,  as  explained  in  our  ori- 
ginal letter,  within  the  present  year. 

We  remain  with  respect  and  esteem, 

Your  obedient  servants, 

RICHARD  M.  YOUNG, 
JOHN  REYNOLDS, 

Agents  of  the  State  of  Illinois  for  making  the  Illinois 
and  Michigan  Canal  State  Loan. 


N.  B. — We  have  omitted  to  send  copies  of  the  communications  ac- 
companying our  original  letter  by  the  British  Queen  of  the  26th  of  the 
present  month,  as  we  are  confident  that  letter,  with  its  contents,  will 
reach  you  safely. 

R.  and  Y. 


[382]  30 

A. 

PHILADELPHIA,  May  23,  1840. 
£20,000  sterling. 

On  the  fifteenth  day  of  July  next  after  date  of  this  our  third  of  ex- 
change, (first  and  second,  of  same  tenor  and  date,  unpaid,)  pay  to  the  or- 
der of  A.  Lardner,  acting  cashier,  twenty  thousand  pounds  sterling,  value 
received;  which  charge  as  advised  by 

Your  obedient  servants, 

RICHARD  M.  YOUNG, 
JOHN  REYNOLDS, 

Agents  of  the  State  of  Illinois  for  Illinois  and 
Michigan  Canal  Loan. 

Messrs.  JOHN  WRIGHT  &  Co.,  London. 


B. 

PHILADELPHIA,  May  23,  1840. 

SIR:  We  send  you  through  the  Bank  of  the  United  States,  the  annex- 
ed bill  on  Messrs.  Wright  &  Co.  London,  for  £20,000  sterling  the  pro- 
ceeds of  which,  when  paid,  you  will  please  apply  to  the  pajmentof  inter- 
est due  on  the  first  Monday  in  July  next  on  £225,000  sterling  Illinois  and 
Michigan  canal  bonds,  No.  1.  to  1,000,  j£22o  sterling  each — interest  at  six 
cent,  annually. 

It  is,  however,  distinctly  understood  between  the  Bank  of  the  United 
States  and  ourselves,  that  should  the  bill  not  be  accepted  or  paid  by 
Messrs.  Wright  &.  Co.,  it  is  not  to  be  protested;  Messrs.  Wright  &  Co. 
having  the  option  to  annul  and  repudiate  the  contract  at  present  existing 
between  them  and  us,  in  relation  to  the  loan  to  the  State  of  Illinois  for 
canal  purposes.  We  have  written  fully  to  those  gentlemen  to-day  on  the 
subject;  and  our  bill,  as  above,  will  be  paid  or  not,  as  they  may  think  pro- 
per to  decide. 

We  are,  very  respectfully, 

Your  obedient  servants, 

RICHARD  M.  YOUNG, 
JOHN  REYNOLDS, 

Agents  of  the  State  of  Illinois  for  making  the  Illinois 

and  Michigan  Canal  Loan. 
S.  JAUDON,  Esq.,  London. 


31  [383] 

C. 

BANK  OP  THE  UNITED  STATES, 

May  523,  1840. 

DEAR  Sm:  The  foregoing  letter  of  Messrs.  Young  and  Reynolds,  is  in 
conformity  to  an  understanding  we  have  with  them,  and  we  request  you 
will  carry  the  same  into  effect. 

Very  respectfully  yours, 

THOS.  DUNLAP. 
S.  JAUDON,  Esq., 

Agent  of  the  Bank  of  the   United  States^  London. 


No.  18. 
General  Thornton  to  Governor  Carlin. 

NEW  YORK,  June  1,  1840. 

DE\R  SIR:  I  have  been  twice  to  Washington,  to  Philadelphia  three 
times,  and  am  now  in  New  York  for  the  third  time,  struggling  to  make  ar- 
rangements for  the  payment  of  the  July  interest  on  canal  bonds,  as  well 
in  London  as  in  New  York.  1  have  spared  neither  labor  nor  responsi- 
bility in  the  attainment  of  so  important  an  object,  convinced,  as  all  others 
connected  with  our  affairs  are,  th;it,  unless  the  interest  be  promptly  pro- 
vided, and  that  provision  be  at  once  made  known,  no  further  negotiations 
need  be  attempted,  either  through  Messrs.  Wright  &  Co.,  on  account  of 
the  State,  or  through  any  other  channel,  on  account  of  contractors.  The 
immediate  prostration  of  the  State  credit,  already  seriously  impaired,  and 
the  consequent  ruin  of  thousands  of  our  citizens,  could  not  be  averted  a 
single  day,  if  it  were  believed  that  any  part  of  our  interest  would  re- 
main unpaid.  After  your  sanction  although  conditional,  of  Messrs. 
Young  and  Reynold's  contract  with  Messrs.  Wright  &  Co.,  1  calculated 
that  the  £10,000  already  drawn,  and  the  £'20,000  authorized  to  be 
drawn  for  in  July,  would  certainly  be  applied  to  the  payment  of  interest, 
since  Messrs.  Wright  &  Co.  had  ample  security  in  their  own  hands  to  re- 
imburse themselves,  even  should  they  choose  to  relinquish  the  contract; 
and  1  was  under  the  impression  that  you  had  written  to  Messrs.  Young 
and  Reynolds  to  pay  the  interest,  if  in  their  power.  But  they  say  they 
have  received  no  order  from  you  to  pay  the  interest  in  any  event;  and 
that  if  they  had,  the  conditions  attached  to  your  sanction  of  Wright  & 
Co.'s  arrangement  render  it  improper  for  them  to  part  with  the  £10,000 
now  in  hand,  until  they  can  be  assured  that  Messrs.  Wright  <fc  Co.  will 
proceed  to  carry  out  thoir  contract,  notwithstanding  the  modifications  in- 
sisted on.  For  the  same  reason,  they  hesitated  several  days  in  drawing 
for  the  £'20,000  due  in  July,  to  enable  me  to  pay  our  interest  in  Lon- 
don; but  have  since  consented,  on  condition  that  I  would  deposite 


[384]  32 

with  them  two  hundred  State  bonds,  until  you  should  have  ordered  them 
to  apply  any  funds  derived  from  Messrs.  Wright  &  Co.  to  the  payment 
of  interest.  Hence  you  will  see  the  necessity  of  immediate  instructions 
to  that  effect. 

Failing  to  obtain  the  £10,000  now  in  the  hands  of  Judge  Young,  I  was 
compelled  to  borrow  $45,000  in  this  city,  for  the  payment  of  that  part  of 
our  interest  coming  due  in  the  United  States,  and  to  rely  upon  arrange- 
ments in  England  to  meet  the  London  interest,  if  Messrs.  Wright  &  Co. 
refused  to  honor  Messrs.  Young  and  Reynold's  bill  for  £20,000;  which 
they  will  have  a  right  to  do,  and  which,  by  agreement  with  the  Bank  of 
the  United  States,  is  not  to  subject  us  to  any  damages  whatever.  But  I 
carry  such  letters  to  Mr.  Jaudon  and  others  at  London,  as  will,  with  very 
little  doubt  secure  the  payment  of  the  European  interest  at  the  proper 
time.  It  is  the  unqualified  opinion  of  every  intelligent  financier  I  have 
conversed  with,  that  unless  our  engagements  are  kept  with  Wright  &. 
Co.,  and  they  continue  to  repose  confidence  in  our  stocks,  it  will  be  need- 
less to  offer  the  bonds  in  Europe;  and,  if  discredited  in  Europe,  it  would 
be  equally  fruitless  to  try  the  American  market.  I  therefore  look 
upon  the  good  will  of  Wright  &  Co.  as  so  essential  to  our  preserva- 
tion and  so  necessary  to  the  re-establishment  of  our  character,  that  I  trust 
you  will  not  hesitate  a  moment  in  taking  off  al!  restrictions,  and  leaving 
them  free  to  act  according  to  the  original  understanding  with  Judge 
Young.  By  that  agreement,  the  bonds  were  to  be  sold  or  withdrawn 
within  eighteen  months  from  last  October;  which  limitation,  without 
further  provision,  will  bring  the  matter  to  a  close  in  April  next;  and 
even  if  they  refuse  to  warrant  full  sules  during  the  present  year,  and  I 
am  obliged  to  sell  a  few  bonds  on  account  of  the  contractors,  any  money 
which  Wright  &  Co.  can  furnish  up  to  the  middle  of  April  will  be 
much  needed  before  new  negotiations  can  possibly  be  effected.  Judge 
Young  and  Governor  Reynolds  will  write  you  on  the  same  subject;  and  if, 
our  recommendation  be  attended  with  success,  they  should  be  informed 
of  it  with  the  least  possible  delay,  in  order  that  the  information  may  reach 
London  time  enough  to  avail  us,  in  the  event  of  the  refusal  of  Wright  & 
Co.  to  proceed  as  now  restricted. 

I  have  had  engraved  under  the  supervision  of  Judge  Young,  new 
bonds  of  £300  and  £100,  with  semi-annual  interest,  to  an  amount  suffi- 
cient to  substitute  those  in  the  possession  of  Messrs.  Wright  &  Co.,  (say 
£425,000  sterling)  which  will  be  forwarded  to  you  without  delay;  and  I 
beg  you  will  be  good  enough  to  execute  them  as  early  as  practicable, 
and  transmit  them  to  Judge  Young,  who  will  take  the  proper  s-teps  to 
forward  them  to  me  in  London;  and,  if  used  by  Wright  &  Co.,  I  will 
take  up  the  old  bonds,  and  deliver  them  to  you  on  my  return,  (seeing  that 
they  ate  first  hammer-cancelled,)  as  soon  as  the  others  pass  into  the  hands 
of  Wright  &  Co.  I  shall  also  have  prepared  500  bonds  of  $1,000  each, 
to  be  sold  in  this  country  for  scrip  and  money,  which  when  you  have 
executed,  you  will  hold  until  bonds  of  £'225  each  be  presented  to  you  in 
exchange,  by  those  to  whom  I  may  sell  with  that  condition,  agreeably  to 
your  letter  of  instructions,  to  me  of  the  1st  of  last  month.  Our  delega- 
tion generally,  and  Judge  Young  particularly,  have  been  very  useful  to 
me  in  procuring  me  proper  letters,  and  otherwise  aiding  me  in  the  object 
of  my  mission.  I  am  using  every  effort  to  get  off  this  morning  in  the 


33  [385] 

British  Queen  for  London;  consequently  arn  much  hurried,  which  will 
excuse  me,  1  hope,  for  the  hasty  manner  I  have  made  this  communication. 
I  shall  write  again  from  London  as  soon  as  I  can  do  any  thing  decisive, 
and  would  be  much  pleased  to  hear  from  you. 

Very  respectfully,  your  obedient  servant, 

W.  F.  THORNTON. 
His  Excellency,  THOMAS  CARLIN,  Governor  of  Illinois. 


No.  19. 
Gen.  Thornton  to  Nevins^  Townstnd  fy  Co. 

WASHINGTON  CITY,  May  29,  1840. 

GENTLEMEN:  You  will  please  deliver  to  Messrs.  Richard  M.  Young  and 
John  Reynolds,  of  Illinois,  bonds,  or  Illinois  and  Michigan  canal  stock,  to 
the  amount  of  £45,000  sterling;  to  be  held  by  them  as  security  for  draw- 
ing on  Messrs.  Wright  &  Co.  of  London,  for  £20.00(1;  to  be  applied  to 
the  payment  of  interest  on  £225,00  sterling  of  said  stock,  due  in  London 
the  1st  of  July  next. 

Respectfully, your  obedient  servant, 

W.  F.  THORNTON. 
Messrs.  NEVINS,  TOWNSEND  &  Co.  New  York. 


No.  20. 
John  Wright  6f  Co.  to  R.  M.  Young  and  John  Reynolds. 

LONDON,  June  30,  1840. 

MY  DEAR  SIRS:  Thanks  for  your  kind  communications;  and  I  am 
happy  to  find  that  all  the  difficulties  (as  I  fully  expected)  about  the  par 
of  exchange  have  been  satisfactorily  arranged. 

Gen.  Thornton,  to  whom  I  have  had  the  greatest  pleasure  in  being  in- 
troduced, has  arranged  with  us  to  continue  the  issue  of  the  bonds,  as 
agreed  between  us,  till  March,  1841,  subject  then  to  new  arrangements; 
so  that  we  shall,  or  rather  have,  accepted  the  bill  of  £20,000. 

I  am  happy  to  say,  among  our  private  connexions  we  have  sold  bonds 
to  cover  the  above  amount,  and  hope  to  succeed  equally  well  in  future: 
but  there  is  no  chance  with  the  public  at  the  price  mentioned,  just  at 
present;  but  time?  must  alter  this  side  March. 

Trusting  this  will  find  you  quite  well,  believe  me  yours,  ever  sincerely, 

JOHN  WRIGHT. 

Messrs.  YOUNG  and  REYNOLDS. 


|386]  34 

No.  21. 
From  Gov.  Carlin  to  K.  M.  Young. 

QUINCY,  ILLINOIS,  June  14,  1840» 

DEAR  SIR:  Your  letter  of  the  26th  ultimo,  together  with  the  accompa- 
nying copies  ofletters  addressed  to  Messrs.  Wright  &  Co.  of  London,  and 
to  Gen.  W.  F.  Thornton;  also,  a  copy  of  a  letter  from  Messrs.  Wright  & 
Co.  to  Thomas  Dunlap,  President  of  the  United  States  Bank,  were  received 
by  last  mail,  and  I  hasten  to  reply.     Your  letter  to  me,  and  the  accom- 
panying copies,  most  fully  disclose  the  difficulties  with  which  the  atiairs 
of  the  canal  are  surrounded,  and  its  future  prospects  and  progress  threat- 
ened.    The  last  Legislature,  by  their  act,  required  the  canal  commission- 
ers to  sell  as  much  of  the  canal  lands  as  would  be  necessary  to  pay  the  in- 
terest upon  the  canal  debts  for  the  present  year;  consequently,  no  other 
legitimate  source  was  left  from  whence  to  derive  the  means  for  that  pur- 
pose.    But,  being  verbally  informed   by  General  Thornton,  in  March 
last,  that  money  could  not  be  realized  from  the  sale  of  lands  to  meet  the 
interest  which  would  fall  due  on  the  1st  July  next,  and  believing  that  the 
character  and  true  interest  of  the  State  depended  upon  the  punctual  pay- 
ment of  the  interest  as  it  became  due,  I  took  the  responsibility  of  instruct- 
ing you  and  Governor  Reynolds  to  use  every  exertion  to  sell  bonds  for 
that  purpose ;  which,  however,  proved  unavailing.     At  that  time,  as  at 
present,  I  felt  fully  persuaded  that  the  confirmation  of  your  contract  with 
Messrs.  Wright  &  Co.  was  the  best  that  could  probably  be  done,  to  en- 
able the  State  to  progress  with  the  work  on  the  canal;  but  the  uncertainty 
of  obtaining  the  money  from  that  quarter  to  meet  the  expenditures  for 
the  year,  together  with  the  doubts  I  entertained   of  the  contract  being 
strictly  a  par  sale,  and  the  powerful  efforts  by  members  of  the  Legislature 
to  repudiate  not  only  that,  but  all  other  contracts  made  by  the  agents  of 
the  State  during  the  past  year,  deterred  me  from  approving  it  at  that  time. 
The  doubts  I  entertained,  however,  of  its  being  completely  a  par  transac- 
tion, principally  controlled  m^  action  thus  far;  believing,  as  I  did,  that 
the  hostility  evinced  by  a  portion  of  the  Legislature  did  not  emanate  from 
the  most  patriotic  motives;  but  when  the  necessity  arose  of  paying  the 
contractors  with  State  bonds,  I  then  determined  that  the  interest  of  the 
State  would  be  better  promoted  by  availing  ourselves  of  your  contract, 
provided  the  money  could  be  had  within  the  present  year,  and  thus  super- 
sede the  payment  of  bonds  to  contractors.     This  conclusion  was  appro- 
baled   by  General  Thornton;  but  he  alleged  that  the  money  must  be 
received  during  the  present  year,  or  the  greater  portion  of  it,  otherwise 
it  would  be  unavailing.  From  the  tenor  of  your  letter,  as  well  as  of  a  pub- 
lished letter  from  General  Thornton  to  William  B.  Ogden,  of  Chicago, 
I  would  infer  that  some  misunderstanding  existed  between  Gen.  Thorn- 
ton and  myself,  in  relation  to  the  confirmation  of  your  contract  with 
Messrs.  Wright  &  Co.  and  the  payment  of  interest,  &c.     J  cannot,  how- 
ever, conceive  it  possible   that  the  General  could  have  understood  that 
your  contract  was  approved  unconditionally,  as  he  expressly  stated  that 
the  money  must  be  realized  during  the  present  year. 


35  [387] 

A  failure  to  pay  the  interest  punctually,  as  it  becomes  due,  under  exist- 
ing circumstances,  would,  in  my  conception,  prove  most  destructive  to  the 
interest  and  prospects  of  Illinois;  and  I  would,  unhesitatingly,  incur 
almost  any  responsibility  to  avert  such  a  calamity.  You  say,  that  "if  it 
is  desirable  to  carry  out  our  contract  with  Wright  &  Co.  in  good  faith, 
my  present  impression  is  that  it  will  be  essential  for  you  to  withdraw  the 
limitation  contained  in  your  letter  of  approval  of  the  1st  of  May,  so  as 
to  leave  the  payments  to  be  made  according  to  the  terms  of  the  agree- 
ment." 

If  a  withdrawal  of  the  limitation  of  the  time  of  payment  could  now 
furnish  the  means  of  the  payment  of  the  interest  falling  due  on  the  1st 
of  July  next,  both  in  New  York  and  in  London,  and  save  the  State  from 
the  humiliation  and  mortification  of  a  forfeiture  of  good  faith  and  honor, 
it  unhesitatingly  would  be  done:  but  if  such  withdrawal  would  not  pre- 
vent the  catastrophe,  no  end  nor  advantage  would  be  attained  by  it.  And 
as  the  interest  will  become  due  about  the  time  this  reaches  you,  it  will, 
therefore,  be  too  late  to  make  any  provision  for  the  interest  falling  due  in 
London;  but  I  will  repeat,  that  if  such  withdrawal  will  avert  the  cala- 
mity, then  it  is  freely  and  fully  made.  An  additional  reason  to  those 
before  stated,  for  not  promptly  approving  your  contract  with  Messrs. 
Wright  &  Co.  was,  that  if  the  money  was  not  paid  during  the  year,  the 
Legislature  would  be  convened  before  any  thing  could  be  derived  from 
thai  source;  and,  therefore,  an  opportunity  afforded  to  make  any  provi- 
sion they  might  think  proper,  for  the  future  wants  of  the  canal.  You 
will  discover  that  the  entire  \bject  is  to  provide  for  the  present  year. 
General  Thornton  spoke  to  me  of  the  guaranty  offered  by  Col.  Mather, 
as  President  of  the  State  Bank  of  Illinois,  for  the  reimbursement  of  the 
New  York  interest;  and  he  added,  that  he  would  not  leave  the  eastern 
cities  until  the  interest  was  provided  for.  I  therefore  relied  upon  his, 
yours,  and  Gov.  Reynolds'  joint  exertion;  and  still  hope  that  you  will 
succeed  in  devising  and  procuring  means  to  pay  the  interest.  I  cannot, 
however,  disapprove  your  caution,  situated  as  you  are,  in  holding  the 
proceeds  of  the  £10,000  untouched,  for  reimbursement  to  Wright  &  Co. 
in  case  he  should  decline  the  proposed  change  of  contract.  If  I  had  the 
control,  at  present,  of  any  fund  belonging  to  the  State,  I  would  not  hesi- 
tate to  divert  it  from  its  legitimate  use,  and  apply  it  to  the  payment  of  the 
interest. 

1  have  a  letter  now  before  me,  from  Mr.  Woodbury,  Secretary  of  the 
Treasury,  informing  me  that  $57,289  37,  on  account  of  the  three  per 
cent,  fund,  arising  from  the  sales  of  public  lands,  is  due,  and  ready  to  be 
paid  to  the  State  of  Illinois  on  the  application  of  the  proper  authority,  to 
be  accompanied  by  a  report  in  conformity  to  the  act  of  Congress  of  the 
12th  December,  1820,  giving  an  account  of  the  application  of  said  fund 
by  the  State,  &c.  This  fund  is,  by  law,  to  be  added  to  the  school  fund, 
and  I  have  no  control  of  it,  otherwise,  I  would  apply  it  to  the  payment 
of  the  interest,  and  reimburse  it  out  of  the  first  money  procured  for  canal 
purposes.  Mr.  Woodbury's  letter  will  be  enclosed,  this  evening,  to  the 
Auditor  and  Secretary  of  State — the  money,  to  be  drawn  for  and  re- 
ceipted by  them;  and  it  then  becomes  revenue  for  the  use  of  the  State. 
But  still  I  have  no  control  over  it.  1  hope  you  will  use  the  utmost  dili- 
gence to  provide  means  for  the  payment  of  the  interest;  and  whatever 


[388]  36 

responsibility  you  may  incur,  shall  be  sustained  to  the  utmost  by  me,  and' 
I  feel  assured,  by  the  Legislature  and  the  people  also. 

Your  friend, 

THOS.  CARLIN. 
Hon.  R.  M.  YOUNG, 


No.  -22. 
GOP.  Carlin  to  R.  M.  Young  and  John  Reynolds. 

QUINCY,  ILLINOIS,  June  25,  1840. 

GENTLEMEN:  I  have  only  time  to  drop  you  a  hasty  line,  to  let  you  know 
that  I  have  determined  to  take  the  responsibility  of  confirming  Judge 
Young's  sale  of  $1,000,000  canal  bonds  to  Messrs.  Wright  &  Co.  uncon- 
ditionally, according  to  the  tenor  of  that  contract.  This  I  would  have 
preferred  doing  at  the  outset,  to  the  payment  of  bonds  to  contractors, 
had  it  not  been  doubtful  as  to  the  receipt  of  the  money  in  due  time  to 
meet  the  wants  upon  the  canal;  and  General  Thornton  himself  insisted 
that  it  would  not  do  to  rely  upon  that  contract  for  money  to  defray  the 
expenses  of  the  canal  during  the  year,  as  it  would  depend  upon  the  sales 
made  by  Mr.  Wright,  and,  consequently,  nothing  certain  could  be  de- 
pended upon  from  them;  but  as  the  General  and  yourself,  and  Judge 
Young,  agree  in  recommending  it,  I  have  consented.  You  will,  there- 
fore, please  confirm  the  contract,  in  case  Mr.  Wright  has  not  previously 
accepted  of  the  restriction  proposed  in  my  letter  to  you  of  the  1st  of  May 
last.  The  new  bonds,  to  supply  those  in  the  possession  of  Mr.  Wright, 
have  been  received  and  signed  by  me  this  day,  and  will  be  sent  by  to- 
morrow's stage  to  Springfield,  to  be  completed;  and  thence  to  you,  ac- 
cording to  the  request  of  Gen.  Thornton,  to  be  forwarded  by  you  to  him, 
at  London.  I  have  thought  it  best  to  leave  the  filling  up  of  the  numbers, 
and  to  whom  payable,  blank;  to  be  filled  up  according  to  your  direction, 
as  it  may  be  possible  that  Mr.  Wright  will  decline  the  contract,  altoge- 
ther, and  in  that  event  the  bonds  could  be  made  payable  to  another:  be- 
sides, I  am  not  entirely  positive  of  the  commencing  number  of  those  bonds 
now  in  Mr.  Wright's  hands.  I  expect  the  new  bonds  will  be  conveyed 
to  you  by  Mr.  Roberts,  of  Springfield.  Want  of  time  compels  me  to 
close. 

Your  friend, 

THO.  CARLIN, 

Governor  of  Illinois. 

Hon.  R.  M.  YOUNG  and 

JOHN  REYNOLDS. 


37  [389] 

No.  23. 
GOTO.  Carlin  to  R.  M.   Young. 

QUINCY,  ILLINOIS,  July  2,  1 840. 

DEAR  SIR:  I  wrote  you  in  great  haste  on  the  25th  ultimo,  informing 
you  that  I  had  determined  to  confirm  your  sale  of  $1,000,000  canal  bonds 
made  to  Messrs.  Wright  &  Co.  of  London,  in  October  last,  free  from  all 
restriction.  This  I  would  have  done,  in  preference  to  the  payment  of 
bonds  to  contractors;  but  the  committee  appointed  by  the  contractors 
about  the  1st  of  March  last,  composed  of  General  Thornton  and  others, 
albged  that  your  contract  could  not  be  relied  on  for  money  to  meet  the 
wants  of  the  contractors,  as  it  depended  upon  Mr.  Wright's  success  in 
selling  the  bonds;  and,  in  case  he  should  fail  to  procure  the  money  to 
meet  their  demands  during  the  present  year,  inevitable  ruin  would  be 
the  consequence.  But  Gen.  Thornton  wrote  me,  immediately  before  his 
departure  from  New  York  to  Europe,  urging  the  propriety  ot  confirming 
your  contract,  and  says  that  it  will  dispense  with  the  sale  of  bonds  on 
account  of  the  contractors.  I  therefore,  without  hesitancy,  consented, 
and  expressly  informed  and  instructed  him  that  it  should  supersede  the 
sale  of  that  amount  of  bonds  on  account  of  contractors.  The  semi-annual 
bonds  will  be  forwarded  to  you  by  the  Auditor  from  Springfield:  you 
will  please  send  them  as  early  as  possible  to  Gen.  Thornton,  a.  London, 
and  advise  Messrs.  Wright  &  Co.  on  receipt  of  them,  to  cancel  the  bonds 
which  you  left  in  their  hands  before  surrendering  them  to  Gen.  Thornton, 
to  be  by  him  returned  to  me. 

It  would  seem  by  General  Thornton's  letters  to  me,  that  some  misun- 
derstanding existed  in  relation  to  the  payment  of  the  July  interest,  as  it 
seems  thai  he  expected  me  to  direct  you  to  apply  the  £10,000  which  you 
have  drawn,  and  the  £20,000  which  you  were  authorized  to  draw  for  on 
Mr.  Wright,  to  its  payment.  This  I  could  not  do  before  Mr.  Wright  had 
consented  to  the  proposed  alteration  of  the  contract.  I  understood  Gen. 
Thornton  to  say  that  he  thought  the  guaranty  of  Col.  Mather  would  be. 
sufficient  to  induce  you  to  do  so,  in  case  the  interest  could  not  be  pro- 
vided for  from  some  other  source. 

Your  friend, 

THO.  CARLIN. 

Hon.  RICHARD  M.  YOUNG. 


No.  24. 
Messrs.  Young  and  Reynolds  to  John  Wright  fy  Co. 

WASHINGTON  CITY,  July  20,  1840. 

DEAR  SIR:  Yours  of  June  30th,  acknowledging  the  receipt  of  our  com- 
munication-; on  the  subject  of  our  agreement  of  October  30, 1839,  is  duly 
received,  and  we  are  happy  to  learn  that  the  difficulties  with  which  our 
negotiation  was  surrounded  arc  likely  to  be  removed.  The  new  bonds, 


(390]  38 

in  denominations  of  £300  and  £100,  respectively,  with  interest  payable 
semi-annually,  duly  executed  hy  the  Governor  of  Illinois  and  the  Auditor 
of  State,  with  the  great  seal  of  State  affixed,  in  pursuance  of  the  laws  of 
Illinois,  have  been  received  by  us  in  this  city  from  Illinois,  and  transmit- 
ted to  Messrs.  Nevins,  Townsend  &  Co.  of  the  city  of  New  York,  with 
instructions  to  forward  them  to  Gen.  Thornton  in  London  by  the  earliest 
safe  conveyance,  to  be  exchanged  by  you  as  far  as  may  be  necessary  for 
the  bonds  now  in  your  hands.  It  is  the  request  of  Gov.  Carlin,  of  Illinois, 
that  you  cause  the  old  bonds  to  be  cancelled  before  their  delivery  in  ex- 
change to  Gen.  Thornton  for  the  renewed  ones,  which  will  relieve  all 
the  parties  concerned  from  any  further  responsibility  in  relation  to  them. 
It  is,  nevertheless,  his  wish  that  Gen.  Thornton  should  preserve  them  in 
their  cancelled  condition,  and  bring  them  with  him  on  his  return  home. 
We  are  happy  to  inform  you  that  the  Governor  has  withdrawn  all  restric- 
tion in  respect  to  our  contract,  and  has  authorized  us  to  inform  you  that 
the  contract  is  to  stand,  if  agreeable  to  you,  in  all  respects,  without  any 
restriction  whatever,  according  to  the  original  agreement.  We  trust, 
therefore,  that  you  will  find  yourself  now  placed  in  a  situation,  with 
the  renewed  bonds,  to  make  sales  as  fast  as  the  necessities  of  the  State 
may  require,  at  the  stipulated  prices.  You  will  find  the  numbers,  and  to 
whom  payable,  6fC.  left  blank  in  the  renewed  bonds:  these  we  authorize 
either  yourself  or  General  Thornton  to  fill  up,  as  circumstances  may  re- 
quire. We  sent  a  copy  of  Gov.  Carlin's  letter  to  us  to  Gen.  Thornton, 
in  which  he  agrees  to  confirm  our  contract  in  all  respects  as  it  was  made 
with  you,  which  we  requested  Gen.  Thornton  to  communicate  to  you. 
We  are  obliged  to  you  for  the  acceptance  of  our  draft  for  £20,000  ster- 
ling, and  are  pleased  to  understand  by  your  letter  that  you  have  sold  a 
sufficiency  of  our  securities  to  indemnify  for  advances  thus  far  made,  &c. 
We  trust  that  you  will  continue  to  exert  yourself  for  our  State;  and  that 
you  may  be  fully  indemnified  in  the  sequel  for  all  the  trouble  and  vexa- 
tion we  have  given  you,  and  to  which  you  may  yet  be  subjected  before 
our  negotiation  is  brought  to  a  termination.  ^ 

Wishing  you  health  and  happiness,  we  subscribe  ourselves,  most  re- 
spectfully, your  obedient  servants, 

RICHARD  M.  YOUNG, 
JOHN  REYNOLDS, 

Agents  of  the  State  of  Illinois  for  negotiating  loans  for  the 
Illinois  and  Michigan  Canal. 

JOHN  WRIGHT,  Esq. 

No.  6  Henrietta  street,  Covent  Garden,  London. 


No.  25. 

Messrs.  Wright  fy  Co.  to  R.  M.  Young. 

. 

LONDON,  August  29,  1840. 

SIR:  We  duly  received  your  favor  of  the  20th  ultimo,  by  the  British 
Queen,  which  also  brought  us  the  box  advised  in  your  letter,  addressed 


39  [391] 

to  Gen.  Thornton;  which  we  have  opened,  and  find  to  contain  bonds  of 
£100  and  £300  each,  to  the  amount  of  £225,000. 

In  consequence  of  what  the  General  said  to  us  before  he  quitted  Eng- 
land, we  have  considered  it  more  prudent  not  to  disturb  these  bonds  until 
we  have  written  instructions  again  ffom  you,  as  he  seemed  anxious  (as  he 
will  no  doubt  explain  to  you,)  that  we  should  transmit  some  of  these  bonds 
to  Messrs.  Smith  &  Co.  and  take  in  return  some  of  those  already  in  their 
hands. 

If  you  think  it  more  desirable,  we  could  give  them  the  whole,  and  await 
the  exchaige  of  those  already  advised  to  you  as  having  been  sold  to  our 
friends,  until  the  next  package  ariives,  when  we  could  return  all  the  bonds 
cancelled,  with  coupons  payable  annually,  (which  will  never  suit  our 
market,)  held  by  us  and  Messrs.  Smith  &  Co. 

For  these  reasons  we  shall  wait  until  we  hear  from  you  again.  We 
presume  the  £100  bonds  transmitted  should  be  numbered  from  1  to  450, 
and  the  £300  from  1  to  600;  upon  which  point  you  will  be  pleased  to 
favor  us  with  your  instructions.  In  the  interim  we  have  every  hope  that 
after  Messrs.  Smith  &  Co.  shall  have  disposed,  at  the  lower  price,  of  the 
bonds  they  contracted  for,  of  being  able  to  resume  the  sales  as  heretofore. 

We  trust  Gen.  Thornton  has  safely  arrived  on  your  side  of  the  water; 
and,  with  our  best  compliments  to  him,  we  remain,  sir, 

Your  obliged  servants, 

WRIGHT  &  Co. 

P.  S. — The  letter  addressed  by  you  to  General  Thornton  we  have  also 
opened,  being  aware  that  it  only  advised  the  transmission  of  the  bonds. 
To  Judge  YOUNG, 

Washington,  U.  S. 


No.  26. 
R.  M.  Young  to  John  Wright  <£•  Co. 

QUINCY,  ILLINOIS,  Oct.  15,  1840, 

GENTLEMEN:  Yours  of  the  29th  of  August  ultimo,  advising  me  of  the 
receipt  of  mine  of  the  20th  of  July,  by  the  British  Queen,  with  the  box  of 
canal  bonds  forwarded  by  the  same  conveyance,  is  duly  received.  You 
are  right  in  supposing  that  the  £100  bonds  should  be  numbered  from  1  to 
450,  and  the  £300  bonds  from  1  to  600;  and  you  are  authorized  to  cause 
them  to  be  numbered  accordingly.  Gov.  CarJin,  our  State  Governor, 
and  Gen.  Thornton,  are  now  present  while  I  am  writing,  and,  with  their 
concurrence,  I  empower  and  request  you  to  transfer  the  £225,000  of  new 
bonds,  with  semi  annual  interest  received,  as  advised  by  your  letter,  to 
Messrs.  Maaniac,  Smiths  &  Co.  in  fulfilment  of  Gen.  Thornton's  contract 
with  that  house.  We  shall  expect  you  in  the  mean  time  to  pay  the  Janu- 
ary interest  on  these  bonds,  as  proposed  by  you  in  your  letter  to  General 
Thornton  of  July  18,  and  will,  of  course,  make  no  other  arrangement. 
General  Thornton  has  brought  with  him  from  our  seat  of  Government 


[392J  40 

£225,000  also,  of  the  new  form  of  bonis,  which  only  require  the  Gover- 
nor's signature  to  make  them  perfect.  These  bonds,  when  executed,  are 
intended  to  be  substituted  in  the  place  of  those  you  now  hold,  and  which 
you  are  requested  to  transfer  to  Messrs.  Magniac,  Smiths  &  Co.  1  shall 
set  out  for  Congress,  at  Washington,  about  the  10th  of  November  instant; 
and  as  this  will  be  the  first  safe  opportunify  of  conveying  these  bonds  to 
New  York,  1  expect  to  take  them  with  me.  They  will,  immediately  on 
my  arrival  in  New  York,  be  transmitted  to  you  at  London.  You  will 
pursue  the  Governor's  directions  in  cancelling  all  the  old  bonds,  and  af- 
terwards sending  them,  as  soon  as  the  renewed  ones  are  received,  to  my 
address,  care  of  Messrs.  Nevins,  Townsend  &  Co.  New  York.  You  will 
also  see  that  the  coupons  on  the  renewed  bonds  are  made  to  correspond 
precisely  with  those  attached  to  the  old  bonds.  We  confidently  expect  you 
will  use  every  exertion  to  sell  these  bonds  on  the  terms  agreed,  as  we  are 
very  solicitous  that  the  work  on  the  canal  should  not  be  interrupted  for 
the  want  of  funds.  I  think  you  may  expect  the  new  bonds,  which  I  will 
take  out  with  me  to  New  York,  from  the  middle  to  the  latter  part  of  De- 
cember. Please  inform  me  whether,  on  the  receipt  of  the  new  bonds,  we 
might  be  permitted,  in  case  of  necessity,  to  anticipate  sales,  in  sums  to 
suit  your  convenience,  from  £30,000  to  £50,000.  If  we  succeed  well  in 
the  amount  committed  to  your  care,  it  is  very  probable  that  we  shall 
continue  to  employ  your  house  to  make  sales  for  us  until  the  whole  work 
is  completed. 

Very  respectfully,  «fec. 

RICHARD  M.  YOUNG. 
Messrs.  JOHN  WRIGHT  &  Co. 


No.  27. 

Extract  from  Gov.  Carlin's  Message  to  the  General  Assembly  of  Illinois > 
dated  November  26,  1840. 

"To  pay  that  portion  of  interest  falling  due  in  Europe,  (in  July  last,)  a 
draft  was  drawn  by  Judge  Young  upon  Messrs.  John  Wright  &  Co.  of 
London,  for  £'20,000;  it  being  part  of  £30,000  advanced  by  said  company 
on  a  contract  for  $1,000,000  canal  bonds,  entered  into  in  October,  1839. 
£10,000,  being  the  residue  of  the  above  £30,000  advanced  by  said 
Wright  &  Co.  has  been  placed  on  deposite  in  the  United  States  Bank, 
and  1  have  instructed  Judge  Young  to  apply  so  much  thereof  as  may 
be  necessary  for  the  payment  of  the.  interest  becoming  due  in  New  York 
on  the  first  Monday  in  January  next;  and  I  am  informed  by  General 
Thornton,  that  the  means  are  provided  to  meet  the  interest  due  in  Lon- 
don at  the  same  time.  As  the  contract  with  Messrs.  Wright  &  Co. 
was  much  animadverted  upon  by  the  last  Legislature,  notwithstanding 
I  was  convinced  that  no  sale  could  be  made  more  advantageous  to  the 
State  at  the  time  it  wag  effected,  or  during  the  present  year,  yet  I  hesi- 
tated very  much  before  assenting  to  its  confirmation.  Being,  however, 
informed  that  no  other  means  could  be  obtained  to  meet  the  July  interest 
in  juondon,  to  prevent  a  forfeiture  of  good  faith  on  the  part  of  the  State, 


41  [393] 

I  at  once  determined  to  confirm  the  contract.  The  residue  of  the  bonds, 
after  deducting  the  £30,000  advanced,  still  remain  in  the  hands  of  Messrs. 
Wright  &  Co.  and  are  as  yet  unavailable  to  the  canal  fund.  If  they  are 
not  sold  prior  to  the  1st  of  April  next,  the  contract  ceases  by  its  own  sti- 
pulations; and,  in  that  event,  no  means  are  provided  for  the  prosecution 
of  the  work  on  the  canal  for  the  ensuing  year,"  &c. 

THO.  CARLIN. 
SPRINGFIELD,  November  26,  1840. 


No.  28. 
< 

Samuel  Allinson  to  GOTO.  Carlin. 

LONDON,  December  1,  1840. 

SIR:  It  becomes  my  painful  duty  to  inform  your  Excellency  of  the  fai- 
lure of  Messrs.  Wright  &  Co.  I  address  Judge  Young  and  Gen.  Thorn- 
ton; but  as  those  letters  may  miscarry,  I  think  it  due  to  the  part  I  acted 
in  the  negotiations  of  these  gentlemen,  and  of  Messrs.  Rawlings  and  Oak- 
ley, to  apprize  your  Excellency  of  this  sad  occurrence.  I  beg  to  refer 
you  to  any  of  these  gentlemen  for  my  position  here,  and  to  the  Govern- 
ment at  Washington  for  my  official  character  as  consul  in  France. 

This  is  the  third  private  banking-house  that  has  recently  stopped  here, 
owing,  partly,  to  the  pressure  upon  them  of  the  joint-stock  banks.  Mr. 
Wright  has  made  himself  so  conspicuous  in  the  support  of  American  secu- 
rities on  a  liberal  principle,  that  the  joint-stock  banks,  and  some  city 
bankers  and  brokers,  have  labored  to  destroy  him;  and  their  misrepre- 
sentations induced  the  Bank  of  England  to  withdraw  its  aid  when  most 
needed.  Thus  has  this  old  and  respected  house  become  the  victim  of 
animosity  so  well  directed,  that  I  regret  to  say  it  can  rise  no  more.  The 
house  stopped  on  the  23d  ultimo,  and  a  fiat  of  bankruptcy  has  issued 
against  the  partners.  The  Illinois  bonds  left  with  the  house  by  Judge 
Young  and  Messrs.  Rawlings  and  Oakley,  are  thus,  for  the  moment,  in 
charge  of  the  Court  of  Bankruptcy;  but  no  fear  need  be  entertained  of 
their  appropriation,  except  for  the  amount  advanced  the  State  by  Wright 
&  Co.  1  have  always  understood  Mr.  Wright  that  sufficient  have  been 
sold  to  cover  these  advances.  He  is  in  a  distant  part  of  the  countiy,  but 
I  shall  see  him  in  a  few  days,  and  will  communicate  to  your  Excellency, 
the  state  of  the  account.  To  an  authorized  agent  of  the  State  of  Illinois, 
only,  will  these  bonds  be  delivered,  after  payment  of  any  balance  due 
Wright  &  Co.  I  do  hope  to  make  some  provision  for  the  payment  of 
interest  in  January,  on  the  bonds  sold  by  Wright  &  Co.  and  will  continue 
to  advise  you  of  my  progress.  With  this  view  I  am  negotiating  with  the 
very  powerful  house  of  Palmers,  Mackillop,  Dent  &  Co.;  and  had  1  the 
power  of  securing  to  them  the  banking  account  of  paying  dividends,  1 
should  doubtless  succeed.  This  house  was  selected  by  Gen.  Hamilton  to 
be  the  bankers  for  the  loan  obtained  here  of  two  millions  of  dollars  for 
South  Carolina,  and  by  Col.  Gamble  for  a  similar  loan  for  Florida.  I  ven- 

A2 


[394]  42 

ture  to  recommend  it  to  you  as  one  of  great  resources  and  influence.  They 
are  not  money  bankers,  but  a  commission  house  with  great  means;  and 
for  their  credit,  reference  can  be  made  to  Rowland  &  Aspinwall,  New 
York. 

Mr.  John  Horsley  Palmer  is  a  director  of  the  Bank  of  England,  of 
which  he  has  been  thrice  elected  Governor.  He  originated,  and  by  his 
sole  great  power,  carried  the  measures  of  relief  given  by  the  bank  to  the 
American  merchants  in  ISST-'SS;  and  1  cannot  refrain  from  expressing 
my  conviction,  that  if  the  State  of  Illinois  would  make  this  house  its  agent 
in  Europe,  funds  for  completing  both  the  canal  and  central  railroad 
might  regularly  be  obtained.  1  promised  Judge  Young  and  Gen.  Thorn- 
ton, that,  at  a  proper  time,  I  would  visit  Paris,  with  a  view  to  introduce 
the  Illinois  bonds  in  that  market.  1  have  but  recently  returned  to  Lon- 
don, and  am  able  to  say  that,  with  prudence  and  perseverance,  I  think  a 
large  amount  might  be  placed  there  among  the  higher  classes  in  France. 
The  early  settlement  of  Frenchmen  in  Illinois,  and  the  missions  of  La 
Salle  and  Marquette,  are  topics  of  interest.  The  bonds  of  Ohio  and  New 
York  have  become  a  favorite  en  the  Paris  Bourse;  but  they  were  intro- 
duced cautiously  and  with  great  influence. 

I  observe  that  the  State  holds  40,000  acres  of  unsettled  lands.  Could 
not  these,  with  the  railroad  as  it  progresses,  the  depots,  cars,  revenues, 
&c.  be  pledged  by  the  State  for  the  redemption  of  the  debt  to  be  incurred 
for  that  system  of  improvement,  in  the  same  way  as  the  lands  are  made 
a  security  for  the  canal  debt?  I  think  such  an  arrangement  would  doubt- 
less secure  the  negotiation  of  bonds.  As  an  American,  I  am  truly  desi- 
rous of  serving  the  State  of  Illinois:  my  children  look  to  it  as  their  future 
residence:  my  son  is  laboring  hard  at  King's  college  to  finish  his  educa- 
tion as  an  engineer,  and  go  out  there:  and  I  am  thus  encouraged  to  urge 
upon  your  Excellency,  the  adoption,  as  agents,  of  the  above  house,  known 
as  they  are  throughout  Europe  and  the  United  States. 

I  think  you  will  reflect  how  much  better  a  permanent  agent  of  high 
character  will  serve  the  State,  than  one  of  equal  character  specially  de- 
puted: for  the  first  is  at  home,  ready  to  take  advantage  of  circumstances; 
while  the  other  must  be  a  stranger  to  local  matters,  anxious  to  finish  his 
mission  and  return  home.  The  settlement  of  the  account  with  Wright 
and  Co.  will  require  an  agent  of  character  and  weight.  1  would  there- 
fore advise  that  a  power  of  attorney  be  forwarded  to  Messrs.  Palmers, 
Mackillop,  Dent  &  Co.  to  act  in  the  premises.  I  give  the  names  at  foot. 
The  contract  for  iron  made  by  Messrs.  Rawlings  and  Oakley  with 
Thompson  expires  on  the  1st  of  January,  1841.  Their  contract  is  at 
£9  10s.  The  same  iron  has  ever  since  been  bought,  and  is  now  bought, 
at  £7  to  £7  5s.  Messrs.  Palmer  &  Co.  contracted  with  the  New  York 
and  Erie  Railroad  Company,  early  in  September  last,  for  5000  tons  T 
rails,  at  £9  5s.  per  ton,  on  a  credit  The  iron  was  bought  of  the  British 
Iron  Company,  ana  the  whole  of  it  has  already  been  shipped. 
1  have  the  honor  to  be,  sir,  your  obedient  servant, 

SAMUEL  ALLINSON. 
His  Excellency,  Gov.  CARLW. 

Names  of  the  partners  of  Palmers,  Mackillop,  Dent  fy  Co. — George 
Palmer,  John  Horsley  Palmer,  James  Mackillop,  Lestock  Peach  Wilson, 
Thomas  Dent,  George  Palmer,  jr.  and  Edward  Horsley  Palmer. 


43  [395] 

No.  29. 
R.  M.    Young  to  Samuel  Jaudon. 

NEW  YORK,  Dec.  23,  1840. 

DEAR  SIR:  On  my  arrival  here  on  yesterday,  I  learned  with  much  sur- 
prise that  the  house  of  Wright  &  Co.  of  London,  had  stopped  payment, 
rrudence,  therefore,  requires  that  the  earliest  application  should  be  made 
for  the  return  of  the  Illinois  and  Michigan  canal  bonds,  which  were  left 
on  deposite,  under  the  contract  made  with  that  firm,  by  Gov.  Reynolds 
and  myself,  to  be  sold  on  certain  stipulated  terms,  so  far  as  the  same  may 
not  have  been  sold.  By  our  latest  advices  from  Mr.  Wright,  the  whole 
amount  of  sales  did  not  much  exceed  the  sum  of  £31,000,  and  we  have 
drawn  ^30,300;  so  that  the  greater  portion  are  still  on  hand  and  unsold. 
You  may  recollect  that  the  bonds  wore  not  sold  to  Messrs.  Wright  &  Co. 
nor  were  they  hypothecated  for  any  advances  made;  but  were  merely 
left  for  sale  with  them,  as  agents  of  the  State  of  Illinois.  As  Mr.  John 
Wright  informed  me  in  his  last  letter  that  a  sufficiency  of  bonds  had  been 
sold  to  cover  all  advances,  with  a  small  surplus  in  his  hands,!  presume,  of 
course,  that  there  will  be  no  difficulty  in  the  residue  being  handed  over  to 
you,  on  application.  I  therefore  authorize  you,  as  agent  of  the  State  of 
Illinois,  for  the  control  and  management  of  said  bonds,  to  call  upon  Messrs. 
Wright  &  Co.  for  them,  and  request  that  they  may  be  delivered  over  to 
you,  and  that  they  may  be  immediately  cancelled  either  before  or  sub- 
sequent to  their  delivery  to  you,  and  forwarded  to  my  address  by  the 
earliest  safe  opportunity,  to  the  care  of  the  branch  of  the  United  States 
Bank  in  New  York.  Your  early  attention  to  this  important  business 
will  much  oblige  yours,  very  respectfully, 

RICH'D.  M.  YOUNG, 
Agent  of  the  State  of  Illinois, 
for  negotiating  sales  of  Illinois  and  Michigan  Canal  Bonds. 

SAMUEL  JAUDON,  Esq.  London. 

P.  S. — If  necessary,  please  take  measures  to  prevent  the  furthe  rnego- 
tiation,  or  any  improper  use  being  made,  of  said  bonds. 

R.  M.  YOUNG, 

Agent,  6fC.  of  the  State  of  Illinois. 


No.  30. 
R.  M.  Young  to  John   Wright  fy  Co. 

NEW  YORK,  Dec.  23,  1840. 

GENTLEMEN:  On  my  arrival  in  this  city,  for  the  purpose  of  transmitting 
lo  you  the  £225,000  of  Illinois  and  Michigan  canal  bonds,  in  deuomina- 


[396]  44 

tions  of  £300  and  £100,  with  interest  payable  scmi-annually,  for  the  pur» 
pose  of  substituting  them  in  the  place  of  the  old  bonds  deposited  with  you 
under  our  contract  of  October  30,  1839, 1  learned  with  surprise  and  un- 
feigned regret,  that  your  old  and  respectable  house  had  been  compelled, 
from  its  numerous  engagements,  to  stop  payment.  We  cannot,  of  course, 
expect  you,  under  the  circumstances,  to  proceed  further  with  the  agree- 
ment; and  I  have  accordingly  empowered  Samuel  Jaudon,  Esq.  agent  of 
the  Bank  of  the  United  Slates,  to  call  on  you  for  the  unsold  bonds,  who 
wili  receipt  to  you  for  the  same.  You  can  have  them  cancelled  before 
their  delivery  to  Mr.  Jaudon,  or  he  can  have  it  done  afterwards,  before 
they  are  sent  home.  By  the  latest  advices  from  your  house  the  net  pro- 
ceeds of  sales  exceeded  £31,000;  and  the  advances  were  stated  at 
somewhat  a  Jess  sum,  but  exceeding  £30,000.  If,  by  the  terms  of  the 
sale  of  such  bonds  as  may  have  been  disposed  of,  you  have  undertaken, 
on  the  part  of  the  State  of  Illinois,  to  deliver  bonds  of  the  new  denomina- 
tions of£30j  and  £100.  with  semi-annual  interest,  the  requisite  number 
can  be  forwarded  to  such  person  or  persons  as  you  may  appoint  in  Lon- 
don, as  soon  as  we  are  informed  upon  the  subject.  1  will  of  course  with- 
hold the  bonds  1  have  with  me,  as  you  would  not  expect  me  to  send  them,, 
under  existing  circumstances. 

You  will  please  deliver  the  unsold  bonds  deposited  with  you  to  Mr. 
Jaudon,  on  application.  I  sincerely  condole  with  you  in  your  misfortune, 
and  hope  that  things  may  not  turn  out  as  badly  ibr  your  interest  as  the 
news  on  this  side  ol  the  water  would  seem  to  indicate. 

1  remain,  very  respectfully,  your  obedient  servant, 

RICHARD  M.  YOUNG, 
Agent  of  the  State  of  Illinois  for  Illinois  and 

Michigan  Canal  Loan. 
Messrs.  JOHN  WRIGHT  &  Co.,  London. 


No.  31. 

Richard  M.  Young  to  Gov.  Carlin,  voiih  receipts  A,  B,  C. 

NEW  YORK,  Dec.  28,  1840, 

DEAR  SIR:  1  mentioned  in  my  letter  to  you  of  the  23d  ultimo,  from 
this  city,  that  my  object  in  coming  was  to  pay  the  January  interest  on  our 
canal  bonds,  and  to  forward  the  £225,000  sterling  bonds  of  the  new  de- 
nomination to  Messrs.  John  Wright  &  Co.  of  London,  to  be  substituted 
in  place  of  the  old  ones  deposited  under  the  contract  made  with  that 
house,  by  Gov.  Reynolds  and  myself,  on  the  30th  of  October,  1839.  1 
also  informed  you  in  that  letter,  that  I  had  met  the  news  here  of  the  fai- 
lure of  Messrs.  Wright  &  Co.  and  that  1  had  consequently  refrained  from 
sending  out  the  bonds,  and  would  have  them  cancelled  and  returned  home. 
Upon  further  reflection,  1  think  it  would  be  improper  to  cancel  them 
without  your  instruction  to  that  effect;  and  1  have,  until  further  advised, 
deposited  them  for  safekeeping  with  the  United  States  Bank  in  this  city. 


45  [397] 

As  Mr.  Wright  may  have  sold  the  amount  mentioned  in  his  last  letter,  of 
which  the  net  proceeds  were  stated  at  £31,753  Os.  3d.  with  the  under- 
standing that  the  old  bonds  were,  when  received  by  him,  to  be  substituted 
by  the  new;  and  as  we  have  received  nearly,  if  not  quite,  all  of  these  pro- 
ceed?, justice  and  good  faith  would  seem  to  require  that  so  many  of  the 
new  bonds  should  be  held  in  readiness  to  be  sent  out  to  London  for  this 
purpose,  if  our  next  advices  should  make  it  necessary.  At  the  request  of 
Messrs.  Nevins,  Townsend  &  Co.  who  were  anxious  for  the  arrival  of  Dr. 
Barrett,  fund  commissioner,  (with  whose  co-operation  it  was  hoped  that 
provision  could  be  made  for  the  whole  of  our  interest,  internal  improve- 
ment and  all,  at  the  same  time,  so  as  not  to  make  a  difference  in  the  price 
of  the  coupons  in  this  market,  I  delayed  paying  the  interest  on  the  canal 
bonds  until  to-day.  Dr.  Barrett  not  having  arrived,  and  as  our  State  is 
unrepresented  in  the  Senate,  in  consequence  of  the  indisposition  of  Gen. 
Robinson,  I  could  not  consent  to  remain  any  longer.  I  have  accordingly 
deposited,  in  New  York,  par  funds,  with  the  branch  of  the  United  States 
Bank  in  this  city,  thirty  nine  thousand  dollars,  which  is  sufficient  to  pay 
all  the  interest  on  the  canal  bonds  which  will  become  due,  in  this  city, 
on  the  first  Monday  in  January.  It  is  in  this  bank  that  all  the  coupons 
are  made  payable.  The  above  amount  includes  the  interest  on  the  three 
hundred  thousand  dollars  of  canal  bonds,  sold  to  Mr.  John  Delafield  by 
Messrs.  Rawlings  and  Reynolds.  The  interest  on  the  one  hundred  thou- 
sand dollars  of  canal  bonds,  sold  by  Gen.  Thornton,  which  is  payable  at 
the  Phoenix  Bank  in  this  city,  does  not  become  due  until  the  first  Mon- 
day in  July,  1841.  In  addition  to  the  thirty-nine  thousand  dollars  thus 
deposited,  I  have  paid  eleven  thousand  dollars  to  Nevins,  Townsend  & 
Co.  in  part  payment  of  the  money  advanced  by  them  to  Gen.  Thornton, 
to  pay  the  interest  on  the  canal  bonds  which  fell  due  in  July  last;  making, 
together,  the  sum  of  fifty  thousand  dollars,  in  New  York  par  funds.  The 
amount  drawn  by  me  from  Messrs.  Wright  &  Co.  was  £10,300  sterling, 
equal  to  $49,955  in  specie  funds  in  New  York,  which  will  leave  a  balance 
of  $'45  in  my  favor.  Enclosed  I  send  you  the  duplicate  receipts  for  the 
$39,000  and  the  £225,000  of  bonds  deposited  with  the  United  States 
Bank  in  this  city,  and  for  the  $11,000  paid  Nevins,  Townsend  &  Co.  on 
account  of  money  advanced  to  Gen.  Thornton:  all  of  which  you  will 
please  lay  before  the  Legislature.  I  leave  in  the  morning  for  Washington 
city,  and  will  in  a  very  few  diys  after  my  arrival  make  a  special  report, 
in  detail,  to  you,  of  all  the  matters  connected  with  my  agency. 

Respectfully,  &c. 

R.  M.  YOUNG. 
His  Excellency,  THOMAS  CARLIN, 

Springfield,  Illinois. 


[398]  46 

A. 
$39,000. 

BANK  OP  THE  UNITED  STATES 

in  New  York,  December  28,  1840. 

Received  from  the  Hon.  R.  M.  Young,  of  Illinois,  thirty-nine  thousand 
dollars,  to  be  appropriated  to  the  payment  of  the  interest  due  the  4thiday 
of  January,  1841,  on  the  bonds  of  the  State  of  Illinois.  (Illinois  and  Michi- 
gan Canal  6  per  cents.) 

T.  H.  YOUNG,  Cashier. 


B. 

NEW  YORK,  Dec.  28,  1840. 
$11,000. 


Received  of  Richard  M.  Young,  Esq.  eleven  thousand  dollars,  in  part 
payment  of  moneys  advanced  by  us  to  General  William  F.  Thornton, 
President  of  the  Board  of  Canal  Commissioners,  to  pay  the  July  interest 
last  due  on  the  Illinois  and  Michigan  canal  bonds. 

Signed  duplicate  receipts. 

NEVINS,  TOWNSEND  &  CO. 


C. 

BANK  OF  THE  UNITED  STATES 

in  New  York,  December  28,  1840. 

Received  from  the  Hon.  R.  M.  Young,  of  Illinois,  one  package,  contain- 
ing bonds  of  the  State  of  Illinois,  viz: 

750  bonds  of  £100  sterling  each         -  -        £75,000 

500    do        £300          «  -  -        150,100 


£-225,000 

say  two  hundred  and  twenty-five  thousand  pounds  sterling,  signed  by 
Thomas  Carlin,  Governor  of  Illinois,  and  Levi  Davis,  Auditor  of  State; 
numbers  in  blank;  dated  June  1,  1840.  Said  bonds  to  be  held  subject  to 
the  order  of  the  said  Richard  M.  Young. 

T.  H.  YOUNG,  Cashier. 


No.  32. 

Extract  from  the  Message  ofGov.  Carlin,  in  reply  to  certain  resolutions  ad- 
dressed to  him  by  the  House  of  Representatives,  in  relation  to  the  sum  of 
£10,000,  received  by  R.  M.  Young,  on  the  contract  made  by  him  with  the 
house  of  Wright  fy  Co.  in  London. 
"In  answer  to  the  three  last  inquiries,  I  have  to  say,  that  the  proceeds 

of  the  said  £10,000  sterling,  have  not  been  paid  to  the  canal  commission- 


47  [399] 

ers,  because  the  contract  upon  which  the  money  was  advanced  by  Messrs. 
Wright  &  Co.  was  not  consented  to  and  confirmed  by  me  until  the  25th 
of  June  last,  which  was  subsequent  to  General  Thornton's  demand  for  the 
money  to  apply  to  the  payment  of  the  July  interest,  and,  until  that  time, 
could  not  be  used  ior  canal  purposes.  It  was  therefore  proper  to  with- 
hold it,  in  readiness  to  be  refunded  to  said  Wright  &  Co.  in  case  the  con- 
tract should  not  be  confirmed.  Consequently,  the  agents  declined  to  pay 
over  the  money  when  requested  by  the  President  of  their  board. 

"THO& 


No.  33. 

Extract  from  the  official  letter  of  Gon.  Carlin  to  R-  M.  Young,  dated  at 
Springfield,  December  12,  1840. 

"I  have  to  request  you  to  see  that  the  interest  due  in  New  York,  on  the 
canal  debt,  on  the  first  Monday  of  January  next,  is  promptly  paid  out  of 
the  said  £10,000  sterling.  I  am  informed  that  a  large  surplus  remains 
of  the  £'20,000  received  from  Messrs.  Wright  &  Co.  (by  Gen.  Thornton) 
in  July  last.  That  surplus,  together  with  the  residue  of  the  £10,000,  after 
paying  the  January  interest,  I  wish  you  to  deposite  in  a  safe  bank,  to  the 
credit  of  the  canal  fund,  or  apply  it  as  you  may  hereafter  be  directed,  to 
the  payment  of  the  moneys  borrowed  by  General  Thornton  to  pay  the  last 
interest  in  New  York. 

"Very  respectfully,  &c. 

«THO.  CARLIN. 

*'Hon.  RICHARD  M.  YOUNG." 


ILLINOIS)                                        H,  R.  U2th  ASSEM. 

LEOIS.    J  (2d   SESSION. 


FEBRUARY  27,  1841. 
Read  and  laid  on  the  table. 




SELECT  COMMITTEE, 

. 

ON  PROVIDING  FOR  THE  PAYMENT  OF   INTEREST    ON  THE  STATE  DEBT FOR 

THE  DISPOSITION  OF  THE  SYSTEM  OF  INTERNAL  IMPROVEMENTS, 
AND  FOR  THE    CONTINUANCE    OF  THE  CANAL. 


MR.  EDWARDS,  from  the  Select  Committee  of  nine,  made  the  following 

' 
REPORT: 

The  Select  Committee,  to  whom  was  referred  a  resolution  for  consider- 
ing and  reporting  "  upon  the  best  means  of  further  providing  for  the  pay- 
ment of  interest  on  the  State  debt — for  the  disposition  of  the  system  of  in- 
ternal improvements — and  for  the  continuance  of  operations  on  the  canal," 
have  had  the  same  under  consideration,  and  beg  leave  to  report,  as  fol- 
lows: 

That  they  are  fully  aware  of  the  magnitude  of  the  task  imposed  on  them 
by  the  resolution  above  referred  to — embracing,  as  it  does,  an  outline  of  the 
whole  financial  policy  of  the  State,  and  lequiring  an  investigation  of  the 
true  condition  of  her  liabilities  and  means — together  with  the  best  plan  for 
carrying  on  to  completion  the  public  works  already  begun  by  the  State. 
Nothing  but  an  imperative  sense  of  duty,  and  a  sincere  desire  to  contribute, 
as  far  as  lies  in  their  power,  to  alleviate  the  anxiety  which  now  rests  upon 
the  public  mind,  could  have  prompted  them  to  undertake  a  task  so  onerous 
and  responsible,  and  of  the  practicability  of  which  there  exists  such  a  di- 
versity of  opinion.  Your  committee  do  not  arrogate  to  themselves  any 
superior  wisdom,  or  means  of  information,  over  the  committees  of  this 
House,  to  \rhom  the  questions  embraced  in  the  above  resolution  properly 
belong.  On  the  contrary,  they  freely  acknowledge  their  indebtedness  to 


the  arduous  labors  of  those  committees;  and  so  far  from  desiring  to  super- 
sede them,  their  only  aim  is,  in  the  langauge  of  the  resolution,  further  to 
provide,  if  possible,  for  the  advancement  pi  the  important  interests  therein 
alluded  to.  They  feel,  with  intense  anxiety,  the  urgent  necessity  of  ma- 
king every  exertion  to  rescue  Illinois  from  the  foul  stain  now  likely  to  blot 
her  hitherto  fair  escutcheon — to  relieve  her  from  the  odium  of  being  the 
first  and  only  State  in  the  Union,  which  has  neglected  to  make  the  neces- 
sary arrangements  for  meeting  her  solemn  engagements,  and  preserving 
unsullied  her  oft  plighted  faith;  and  thus  not  only  casting  a  shade  over  her 
own  reputation,  but  bringing  into  reproach  and  disgrace  that  of  her  sister 
States  and  of  the  whole  Union. 

Your  committee  believe  that  all  parties  in  this  State  would  repudiate 
the  conduct  of  Representatives  who  should  return  to  their  homes  without, 
at  least,  making  an  effort,  in  good  faith,  to  avert  such  a  calamity  as  the  one 
impending — one  which  would  render  them  individually  and  collectively 
infamous,  in  the  eyes  of  the  civilized  world — one  which  would  degrade  the 
character  of  the  republican  institutions  which  we  all  profess  so  much  to 
reverence  and  cherish — one  so  entirely  at  war  with  the  sentiments  of  ho- 
nor and  of  honesty  prevailing  among  our  citizens  in  their  piivate  transac- 
tions, and  the  destruction  of  which  they  would  regard  as  the  heaviest  curse 
that  could  befall  a  virtuous,  intelligent  and  free  people.  They  would  most 
sincerely  deplore,  and  most  indignantly  reprobate  the  intrusion  of  any 
party  feeling  or  party  bias  upon  subjects  of  such  vital  concern  to  them- 
selves and  to  the  State.  We,  therefore,  in  behalf  of  our  common  con- 
stituents, most  earnestly  invoke  all  of  both  parties  in  this  House  to  unite 
with  heart  and  hand  in  the  cause  of  the  country — to  stand  shoulder  to 
shoulder  in  upholding  its  faith  and  credit — and  to  retire  from  the  contest 
»n!y  when  that  object  is  attained. 

But  your  committee  are  aware  that  not  only  the  preservation  of  the  faith 
and  credit  of  our  State  demands  this  sacrifice,  but  that  her  pecuniary  in- 
terests must  and  will  suffer  great  and  irreparable  loss,  if  this  Legislature 
shall  adjourn  without  having  made  some  efficient  arrangements  by  which 
such  of  her  works,  as  policy  requires  to  be  continued,  can  be  carried  out  to 
completion.  Should  this  Legislature  so  adjourn,  then  the  people  of  Illi- 
nois will  have  sustained  a  loss  of  nine  or  ten  millions  of  dollars,  without 
the  most  distant  prospect  of  ever  realizing  one  cent  of  profit  or  advantage 
from  so  greaf:  and  ruinous  an  expenditure.  Can  the  people  or  their  repre- 
sentatives, contemplate  such  a  state  of  things  without  feeling  the  sad  and 
alarming  dereliction  of  duty,  on  the  part  of  the  Legislature,  in  failing  to 
make  some  adequate  provision  by  which  something  might  be  preserved 
from  the  general  wreck?  If  they  cannot,  then  it  is  our  high  and  solemn 
duty — at  whatever  sacrifice  of  personal  popularity  at  home,  or  of  ease  or 
tranquillity  here — to  begin,  at  once,  in  good  earnest,  and  make  whatev- 
er progress  therein  that  time  and  circumstances  will  allow.  Nor  should 
we  fear  to  encounter  the  sneers  or  clamors  of  senseless  and  time-serving 
demagogues,  here  or  elsewhere:  for  your  committee  are  assured  that  al- 
though a  temporary  excitement  may  be  got  up  against  them,  yet,  when  the 
subject  is  understood  by  the  people, (and  understood  it  will  be,)  all  who  now 
join  in  endeavoring  to  maintain  the  credit  of  the  State,  and  to  save  a  por- 
tion of  her  vast  investments  from  indiscriminate  ruin,  will  be  cheered  by 
the  welcome  plaudits  of  a  generous  and  high  minded  constituency. 


[391] 


INTERNAI,    IMPROVEMENTS. 


In  the  presentation  of  a  plan  for  carrying  on  the  public  works  of  the 
tState,  your  committee  will  begin  with  the  system  of  internal  improvements 
— a  system  which  they  believe,  from  its  magnitude  and  the  inutility  of  ma- 
ny of  the  works  projected,  it  would  be  altogether  unwise  in  the  State  to 
attempt,  at  this  time,  to  carry  on,  upon  her  own  responsibility,  and  at  her 
own  expense.  But  as  upwards  of  five  millions  of  dollars  have  been  expen- 
ded upon.this  system,  and  no  portion  of  it  completed,  but  many  parts  in  a 
condition  from  whicii  some  advantage  may  derived  to  the  people  and  the 
State,  if  finished;  and  as,  from  the  various  and  conflicting  interests  which 
might,  and  doubtless  would  be  brought  to  bear  upon  this  subject,  no  hope 
can  be  entertained  that  the  State  (even  were  it  desirable  to  do  so.)  would 
finish  those  portions  which  are  most  needed  and  nearest  a  completion,  your 
committee  would  recommend  that  the  plan  submitted  by  the  committee  on 
internal  improvements  should  be  adopted  as  a  part  of  the  policy  of  the 
State. 

This  plan  provides,  in  the  first  place,  for  the  total  suspension  of  all  ope- 
rations upon  the  several  works  of  internal  improvement  under  the  existing 
laws — for  the  prevention,  under  any  pretence  whatever,  of  any  further  al- 
lowance or  expenditure  by  virtue  of  those  laws — for  the  reservation  to  the 
State,  of  lands  and  rights  acquired  under  and  for  the  use  of  the  system, 
from  forfeiture  to  the  individuals  or  corporations  from  whom  they  were 
obtained — for  the  sale  of  all  the  perishable  materials  and  iron  belonging  to 
the  State — and  for  the  repeal  of  so  much  of  any  act  of  this  State  as  authori- 
zes any  person  to  obtain  aw  assessment  for  tlie  right  of  way  on  any  of  said 
works.  Your  committee  believe  (hat  the  above  proposition  is  the  best 
that  can  be  adopted,  under  the  circumstances,  as  it  leaves  it  in  the  power* 
of  the  State  to  make  such  disposition  of  the  public  works  as  circumstances 
may  require — which  power,  it  is  believed,  could  not  have  been  so  safely 
exercised  under  an  entire  and  absolute  repeal  of  the  laws  creating  the 
system. 

Your  committee  further  concur  with  the  committee  on  internal  improve- 
ments in  their  plan  for  the  future  disposition  of  the  public  works — which 
provides  for  the  creation  of  a  board,  on  the  part  of  the  State,  to  exercise  a 
general  supervision  over  all  the  works  of  the  State — to  prosecute  all  tres- 
passers on  said  works — and  to  sell,  lease,  or  contract,  in  relation  to  all  or 
any  part  of  the  different  railways,  laid  out  and  commenced  by  the  State, 
under  the  restrictions  and  securities  therein  provided  for;  and  which  fur- 
ther provides  for  giving  up  the  works  to  companies,  upon  the  condition  lhat 
the  work  done  by  the  State  shall  be  valued — that  the  company  shall  ex- 
pend a  sum  equal  to  the  valuation — and  then  half  as  much  as  will  be  neces- 
sary to  complete  the  work,  before  the  State  shall  be  called  upon  to  contri- 
bute any  thing  further  in  their  prosecution;  after  which,  the  State  and  the 
company  shall  be  joint  proprietors,  and  participate  equally  in  the  profits  of 
the  work — reserving,  at  the  same  time,  to  the  State  the  right  to  purchase, 
within  a  limited  period,  the  interest  of  said  company,  upon  the  payment  to 
them  of  the  amount  which  they  shall  have  expended,  with  six  per  cent,  in- 
terest— and  thefeby  avoiding  the  dangers  of  corporate  monopolies,  whilst 
securing  the  benefits  of  corporate  enterprize. 


[392]  4 

Your  committee  believe  that  the  above  mode  of  disposing  of  the  public 
works  is  decidedly  the  best  th.it  can  be  adopted,  as  it  will  enable  a  discri- 
mination to  be  made  between  those  works  which  are  of  practical  utility 
and  those  which  are  not — a  result  which  could  not  be  attained  in  the  Le- 
gislature, no  one  being  willing  to  authorize  the  expenditure  of  public  mo- 
ney upon  a  work  not  immediately  advantageous  to  his  constituents,  with- 
out including  the  one  in  which  they  were  directly  interested.  It  will  like- 
wise save  the  State  from  any  improvident  appropriations,  since  capitalists 
would  not  expend  their  own  money  in  the  construction  of  a  work,  unless 
it  would  be  likely  to  be  profitable;  and  if  profitable,  it  would  not  fail  to  be 
useful,  as  its  profits  would  depend  upon  the  facilities  it  afforded  to  the  com- 
munity for  travelling  and  the  transportation  of  their  merchandize  and  pro- 
duce. Besides,  this  plan,  it  is  confidently  believed,  would  insure  the  com- 
pletion of  several  of  the  works  upon  which  large  sums  of  money  have  been 
expended,  without  the  possibility  of  loss  to  the  State,  and  greatly  to  her 
advantage,  as  well  in  enabling  her  to  realize  some  profit  from  the  money 
invested,  and  which,  without  this  plan,  must  be  irrecoverably  lost,  as  in 
providing  the  necessary  facilities  for  travelling  and  transportation.  In,  ad- 
dition to  the  above  reasons,  your  committee  would  add  that  this  plan 
would  save  to  the  State  a  large  amount  of  time  and  money,  lavished  upon 
idle,  conflicting  and  exciting  legislation,  in  relation  to  the  several  parts  of 
the  system,  to  the  exclusion  of  other  useful  business — and  would  interpose 
a  safeguard  against  incautious  and  dangerous  grants  of  power  to  particular 
com  panics. 

STATE  DEBT. 

In  reference  to  the  payment  of  interest  of  the  State  debt,  your  commit- 
tee are  disposed  to  concur  with  the  Finance  committee  in  their  plan  for 
taxing  the  salaries  of  the  officers  of  the  State  Government,  as  well  as  the 
members  of  the  Medical  and  Legal  professions,  believing  that,  under  the 
present  financial  embarrassments  of  the  country,  the  imposition  of  such  a 
tax  would  be  cheerfully  submitted  to  by  these  classes.  Nor  would  they 
object  to  a  graduated  tax  upon  deeds  and  other  instruments  of  writing  to 
be  recorded,  feeling,  as  they  do,  the  unavoidable  necessity  of  a  resort  to 
some  specified  objects  of  taxation.  They  do  not,  however,  concur  with 
the  committee  on  Finance  in  their  proposition  to  tax  merchants,  from 
the  consideration  that  if  the  tax  will  have  to  borne  by  the  merchants,  with- 
out being  reimbursed  to  them,  they  could  not,  as  a  class,  justly  be  called 
upon  to  contribute  so  largely  to  the  support  of  government;  especially 
when  they  have  suffered  so  severely  from  the  great  pecuniary  embarrass- 
ments which  have  overwhelmed  the  country  for  the  last  few  years.  If  this 
tax  is,  however,  to  be  charged  by  the  merchant  on  his  goods,  and  collected 
from  the  people,  then  your  committee  believe  that  it  is  not  correct  in  prin- 
ciple, and  would  be  nothing  more  nor  less  than  an  indirect  tax  upon  the 
people; — a  policy  which  your  committee  think  unwise  for  the  purpose  ol 
raising  a  revenue  for  the  support  of  the  State  Government.  They  are  of 
opinion  that  the  people  will  always  be  found  ready  to  submit  to  such  taxa- 
tion as  is  necessary  to  the  wants  of  the  Government;  and  that  they  should 
know  how  much,  and  in  what  manner  their  money  is  taken  from  them.  In 
what  your  committee  have  just  said,  they  do  not  intend  to  reflect,  in  the 


slightest  degree,  upon  the  committee  on  Finance.  Far  from  it.  They 
believe  that  committee  to  be  entitled  to  the  highest  praise  for  the  zeal  and 
industry  displayed  in  their  laudable  endeavor  to  devise  the  means  for  ena- 
bling the  State  to  meet  her  liabilities  without  the  necessity  of  a  resort  to 
taxation.  But  your  committee  are  persuaded  that  such  endeavor  must 
ever  prove  fruitless.  For  there  is  (as  has  been  so  justly  remarked  by  the' 
Governor,  in  his  message,)  no  other  efficient  mode  of  discharging  a  public 
debt  than  by  a  tax  upon  the  industry  and  property  of  the  people. 

In  accordance,  then,  with  this  principle,  which  cannot  be  too  faithfully 
inculcated  upon  the  public  mind,  your  committee  would  further  propose 
that,  in  addition  to  the  taxes  already  laid,  the  sum  of  twenty  cents  on  every 
hundred  dollars  worth  of  property  be  collected  for  State  purposes— that, 
in  the  valuation  of  real  property,  the  minimum  shall  be  fixed  at  four  dol- 
lars— and  that,  in  the  oath  to  be  administered  to  the  assessois,  they  shall 
swear  that  they  will  not  assess  real  estate  at  four  dollars  per  acre,  unless 
in  their  belief,  and  according  to  their  best  judgment,  it  should  not  be  worth 
a  greater  amount.  But,  as  the  revenue  to  be  derived  from  taxation  will 
not  be  available  in  time  to  meet  our  engagements.;  your  committee  would 
recommend  that  the  Governor  shall,  from  time  to  time,  issue  such  an 
amount  of  interest  bonds  as  may.be  absolutely  necessary  to  raise  funds  for 
the  payment  of  interest  upon  the  State  debt,  and  for  the  redemptioniof; 
bonds  heretofore  hypothecated — said  bonds  to  be  reimbursable  in  the  year 
1865,  and  to  bear  interest  at  the  rate  of  six  per  cent,  per  annum,  payable 
semi-annually,  and  to  be  sold  by  the  Fund  Commissioner  for  the  best  (rice 
they  will  command;  and,  that  a  sufficiency  of  the  revenue  raised  from  the 
taxes  above  referred  to,  shall  be  pledged  for  the  payment  of  the  interest 
upon  the  said  bonds.  And  for  the  purpose  of  carrying  out  the  foregoing 
provisions,  your  committee  herewith  report  a  bill  for  the  consideration  of 
this  House. 

In  connection  with  this  subject,  a  majority  of  your  committee  would  fur- 
ther recommend  that  a  law  should  be  passed  for  legalizing  the  late  suspen- 
sion of  specie  payments  on  the  part  of  the  bank  of  the  State  of  Illinois, 
upon  the  condition  that  the  bank  shall  advance  to  the  State  the  sum  of 
one  hundred  thousand  dollars,  annually,  until  the  next  regular  meeting  of 
the  General  Assembly,  to  be  applied  to  the  payment  of  the  debts  of  the 
State,  other  than  thooe  due  to  the  bank;  and  upon  the  further  condition^ 
that  the  bank  shall  accept  the  terms  above  set  forth  at  f.he  first  meeting  of 
the  board  of  directors  after  the  passage  of  a  bill  for  carrying  into  effect  the 
above  provisions,  which  is  herewith  submitted.  This  measure  is  deemed 
of  the  utmost  consequence  by  your  committee.  Although  they  generally 
disapprove  of  bank  suspensions,  yet,  under  the  peculiar  circumstances  of 
this  case,  they  cannot  perceive  how  it  is  possible  to  avert  the  great  and 
alarming  evils  threatended  to  the  State  and  to  the  people  by  the  over- 
throw of  this  institution. 

In  the  first  place,  it  is  well  .known  that  about  three  millions  of  dollars 
are  due  to  the  bank  by  the  citizens  of  this  State.  If  the  bank  should  fail, 
suits  would  be  immediately  commenced  against  all  her  debtors.  They,  in 
turn,  would  be  obliged  to  sue  those  indebted  to  them,  in  order  to  raise  the 
amount  due  to  the  bank;  and  thus  millions  of  money  would  be  in  suit  in 
the  course  of  five  or  six  months.  In  addition  to  the  inconvenience  of  such 
an  increase  of  litigation,  the  hurry  and  anxiety  of  many  persons  to  raise 


[394]  6 

money,  and  the  frequent  sacrifice  of  property  under  the  hamrrter,  would 
occasion  a  most  fearful  depreciation  of  the  value  of  every  description  of 
property.  And  this  depreciation  would  not  only  affect  those  who  were  in- 
debted, but  would  extend  itself  through  every  ramification  of  society. 
Every  man  who  had  any  thing  to  dispose  of  would  sensibly  feel  the  effects 
of  such  derangement.  But  let  us  reflect  further,  that,  if  all  these  debts 
were  collected,  we  should  have  no  currency  left  with  which  to  carry  on  our 
business  transactions,  or  to  pay  the  amount  due  for  taxes  to  the  Govern- 
ment. Nor  can  we  overlook  the  evils  which  would  be  occasioned  by  a 
depreciated  and  valueless  currency  in  the  hands  of  our  citizens — the  gains 
of  which  wo  ild  accrue  to  heartless  brokers  and  speculators,  whilst  the  loss 
would  fall  chiefly  upon  the  poorer  classes,  who  are  not  indebted  to  the 
bank,  and  who  obtained  its  paper  in  exchange  for  the  sweat  of  their  brows. 

In  addition  to  the  losses  incurred  by  the  people  in  their  individual  capa- 
city, they  would  sustain  still  greater  in  their  aggregate  character.  If  this 
bank  should  fail,  the  State  would  lose  a  large  portion  of  the  stock  which 
she  has  invested  in  it,  and  thus  increase  the  general  pressure  arising  from 
the  unwise  negotiation  of  State  bonds,  and  the  injudicious  expenditure  of 
public  moneys.  The  state  of  things  making  necessary  the  legalization  of 
the  suspension  of  specie  payments  was  not  brought  about,  in  the  opinion  of 
your  committee,  nor  is  it  under  her  control.  It  has  existed,  and  will  con- 
tinue to  exist  independently  of  her.  or  of  the  action  of  this  Legislature. 
It  is  a  well  known  fact  that  mostof  the  banks  throughout  the  Union  have 
been  compelled  to  suspend  specie  payments,  and  have  been  sustained  in 
such  suspension  by  their  respective  Legislatures.  The  consequence,  then, 
of  requiring  the  Bank  of  the  State  of  Illinois  to  maintain  her  resumption 
would  be  to  drain  every  cent  of  specie  from  her  vaults,  and  transfer  it  to 
those  of  the  suspended  banks  of  other  States.  And  after  having  thus  de- 
prived us  of  the  only  basis  which  can  elevate  and  preserve  our  own  cur- 
rency, our  institution  must  fail,  and  entail  upon  us  the  train  of  ruinous 
consequences  above  alluded  to.  Every  man  of  experince  must  know  that 
it  is  not  in  the  nature  of  any  banking  institution  to  carry  on  its  operations 
at  a  time  when  it  is  the  interest  of  other  banks  to  press  it  for  the  redemp- 
tion of  its  notes  so  soon  as  they  are  issued.  But  such  is  evidently  the  in- 
terest as  well  as  the  design  of  other  banks  and  capitalists  throughout  the 
country  at  the  present  juncture. 

Your  committee  believe  that  this  question  is  frequently  misrepresented 
to  the  people.  It  is  stated  that  the  Legislature,  by  legalizing  the  suspen- 
sion, confers  upon  the  Bank  privileges  withheld  from  individuals.  This 
statement  of  the  case  is  untrue.  The  Bank  may,  during  a  suspension,  be 
sued,  and  the  amount  or  her  indebtedness  may  be  collected  in  the  same 
manner  as  against  an  individual..  The  only  effect  of  legalizing  the  sus- 
pension would  be,  that  the  existence  of  the  Bank  should  not  be  destroyed 
upon  failure  to  redeem  her  notes  for  a  certain  length  of  time  after  their 
presentation.  She  would  be  just  as  liable  to  be  sued  for  the  same,  and  her 
property  to  be  taken  in  execution,  as  the  humblest  individual  in  the- 
community.  No  remission  of  the  indebtedness  of  the  Bank  ensues  upon 
the  step  proposed  to  be  taken  by  the  Legislature. 

Your  committee  desire  not  to  be  considered  as  being  in  favor  of  suspen- 
sion, unless  imperiously  required  by  the  circumstances  surrounding  us.  If 
those  circumstances  were  brought  about  by  the  Bank,  or  removable  at 


7-  [395] 

her  pleasure,  and  she  should  refuse  to  continue  the  resumption,  none  would 
be  found  more  ready  than  your  committee  to  withhold  every  favor  from 
her. 

In  addition  to  what  they  have  said,  they  apprehend  no  danger  to  the 
pecuniary  interests  of  the  People  in  the  suspension.  They  have  wit- 
nessed the  two  last  suspensions  of  this  Bank,  during  which  her  paper  has 
subserved  the  purposes  of  the  community,  and  realized  the  just  expecta- 
tions of  the  people,  as  far  as  its  office  of  a  currency  was  concerned.  In- 
deed, it  is  believed  that  the  most  distressing  embarrassments  would  have 
resulted  from  any  other  course  than  the  one  pursued  by  former  Legisla- 
tures upon  this  subject.  And  they  believe  that  incalculable  evils  will  be 
the  consequence  of  a  refusal  on  the  part  of  this  Legislature  to  pursue  the 
course  pointed  out  by  our  experience,  and  dictated  by  every  considera- 
tion of  prudence,  nay,  even  of  humanity  itself. 

Your  committee  are  decidedly  of  opinion  that  the  onerous  taxation  to 
be  imposed,  according  to  the  views  of  your  committee,  will  be  but  tempo- 
rary. The  vast  increase  of  wealth  and  population  throughout  this  State — 
the  amount  to  be  received  from  the  lands  not  hitherto  subject  to  taxation 
— the  added  dividends  to  be  derived  from  Bank  stock — together  with  our 
share  of  the  proceeds  of  the  public  lands  (a  distribution  of  which  will  un- 
questionably take  place,  with  or  without  the  sanction  of  Illinois,)  will  be 
sufficient  to  meet  all  our  engagements,  without  oppressing  our  citizens 
with  a  continuance  of  the  heavy  burdens  to  be  borne  for  the  next  two 
years. 

In  conclusion,  your  committee  would  plead  the  want  of  time  as  an  apo- 
logy for  the  crudeness  of  this  report.  They  regret  that  the  threatened  im- 
mediate adjournment  of  this  body  has  left  them  scarce  a  moment  lor  such 
an  investigation  of  the  topics  above  referred  to,  as  their  great  importance 
demands.  But  confiding  in  the  indulgence  of  this  [louse,  in  the  generous 
spirit  of  their  constituents,  and  in  the  consciousness  of  a  patriotic  purpose 
to  cherish  and  protect  every  interest  of  the  State,  they  freely  submit  the 
result  of  their  labors  to  the  better  judgment  of  this  General  Assembly. 

• 

THE    CANAL. 

In  relation  to  the  canal,  your  committee  have  given  it  as  much  conside- 
ration as  limited  time,  and  the  importance  of  other  subjects  referred  to 
them,  would  allow.  It  will  be  seen  by  reference  to  the  laws  relating  to 
the  canal,  that  early  after  its  commencement  the  Legislature  determined 
to  keep  out  of  market  all  canal  lands,  except  in  limited  quantities,  for  the 
purpose  of  paying  interest. 

Your  committee  believe  this  to  have  been  a  wise  and  prudent  policy. 
The  country  then,  as  now,  was  new  and  sparsely  populated.  An  immense 
quantity  of  Government  lands  unsold — not  brought  into  market,  and  a 
large  portion  of  it  unsurveyed,  which  would,  when  brought  into  market, 
be  subject  to  entry  at  Government  price,  by  virtue  of  pre-emption,  and 
after  public  sale  by  private  entry;  thereby  demonstrating  the.  impossibility 
of  obtaining  but  a  small  part  of  its  prospective  value.  Your  committee 
would  respectfully  recommend  the  continuation  of  this  policy,  and  that 
no  lands  should  be  sold  immediately  upon  the  line  of  the  canal,  except  a 


[396]  8 

reasonable  portion  of  lots  in  towns  and  villages,  where  it  may  be  indispen- 
sibly  necessary  for  raising  money  to  pay  interest,  and  increasing  the  value 
of  the  remaining  property;  or  unimportant  lands,  of  I  ut  little  present  or 
prospective  value.  That  the  proceeds  of  sold  and  unsold  lands  be  set 
apart  as  an  interest  fund  agreeably  to  the  provisions  of  a  bill  now  on 
the  table;  and  upon,  and  in  anticipation  of  this  fund,  that  interest  bonds 
be  issued,  bearing  any  rate  of  interest  not  exceeding  seven  per  centum 
per  annum,  to  be  sold,  and  the  proceeds  applied  exclusively  to  the  pay- 
ment of  interest  on  canal  bonds,  for  which  there  may  be  no  other  means  of 
payment,  and  by  this  means  prevent  that  inevitable  sacrifice  which  must 
ensue.  Should  those  lands  be  sold  under  the  present  depressed  and  ruin- 
ous condition  of  the  money  market,  superadded  to  the  newness  of  the 
country,  and  unfinished  state  of  the  canal. 

And  while  your  committee  would  not  hesitate  in  the  opinion  that  the 
State  should  complete  the  Illinois  and  Michigan  canal  as  early  as  possible, 
as  the  only  alternative  whereby  the  State  can  avoid  very  heavy  losses,  and 
while  it  would  be  desirable  to  atrictly  pursue  the  policy  heretofore  adopted, 
provided  means  could  readily  and  certainly  be  obtained,  yet  it  is  believed 
by  your  committee,  that  for  the  purpose  of  securing  the  speedy  and  certain 
completion  of  this  magnificent  enterprize,  within  the  period  of  three  years, 
at  the  prices  for  which  contracts  have  been  let,  and  at  the  estimated  prices, 
where  not  under  contract,  that  it  would  be  best  for  the  State  to  accede  to 
the  proposition  submitted  to  your  committee,  (and  made  a  part  of  this  re- 
port,) by  the  agents  of  the  contractors  on  the  line  of  said  canal. 

It  will  be  seen  by  reference  to  the  report  of  the  canal  commissioners, 
that  the  canal  is  more  than  half  done — much  of  it  under  contract;  and  if 
by  necessity  or  design  the  work  should  be  suspended,  it  will  readily  be 
perceived  that  great  damages  must  accrue,  not  only  to  the  State,  but  to 
all  others  concerned.  To  avert  this  calamity,  a  majority  of  your  commit- 
tee are  of  the  decided  opinion  that  the  State  must  advance  steadily  and 
rapidly  to  the  completion  of  the  work.  By  such  a  course  much  will  be 
saved  in  contingent  expenses,  which  will  be  the  same  in  any  given  time, 
whether  the  expenditure  be  greater  small.  And  the  same  argument  will 
equally  and  forcibly  apply  to  the  accruing  interest  upon  loans  already  ob- 
tained. 

It  must  be  obvious,  also,  that  by  progressing  slowly  with  the  work,  it 
would  be  much  more  expensive  to  the  State,  longer  in  developing  the  real 
value  of  all  kinds  of  canal  property,  and  have  the  effect  to  retard  the  po- 
pulation of  that  part  of  the  country,  while,  by  the  speedy  completion  of 
the  work,  all  these  interests  would  be  fostered  and  protected,  and  conse- 
quences averted  which  would  depress  the  spirit  and  enterprise  of  the  State, 
increase  her  liabilities,  and  injure  her  credti;  and  character  both  at  home 
and  abroad. 

There  are  now  on  hand,  unsold  bonds  for  about  one  million  six  hundred 
thousand  dollars,  in  addition  to  which  a  majority  of  the  committee  recom- 
mend that  three  millions  more  be  issued,  which  sums  are  believed  to  be 
sufficient  for  the  completion  of  the  work;  said  bonds  to  be  issued  and  sold 
at  such  times  and  in  such  quantities  as  will  promptly  meet  the  estimates 
from  time  to  time,  as  it  progresses. 

Your  committee  are  further  of  the  opinion,  that  if  this  policy  is  pursued, 
success  will  attend  the  enterprize,  and  the  canal  will,  as  she  has  heretofore 


9  [397] 

done,  meet  her  own  liabilities,  until  her  own  resources  shall  exceed  the 
interest  on  the  cost  of  construction,  and  produce  an  overplus,  which,  added 
to  the  unexpended  balance  of  the  proceeds  of  canal  property,  will  finally 
extinguish  her  debt.  But,  should  your  committee  be  mistaken  in  then 
views  on  this  part  of  the  subject,  they  hesitate  not  in  expressing  the  be- 
lief, that  on  account  of  the  nationality  of  the  work,  the  boldness  and  splen- 
dor of  the  plan,  the  durability  and  perfection  of  materials,  and  the  execu- 
tion of  construction,  that  the  General  Government  would  not  permit  an 
onerous  debt  to  fall  upon  the  State,  but,  finding  the  trust  confided  to  us 
faithfully  administered,  would  generously,  and  wisely,  grant  further  dona- 
tions, which  might  necessarily  be  required  to  release  the  State  from  injury 
or  loss,  which  she  might  otherwise  sustain.  Your  committee  are  the  more 
confirmed  in  this  opinion,  from  the  fact  that,  while  the  General  Govern- 
ment has,  and  still  may  grant,  liberal  donations  to  this  important  enter- 
prize,  she  is  not  the  loser  by  it — the  entire  donation  being  doubly  returned 
to  her,  on  account  of  the  additional  value  added  to  her  lands  by  means  of 
constructing  the  canal,  and  its  importance  to  her  welfare  by  the  facilities 
it  will  afford  in  a  national  point  of  view,  both  in  peace  and  in  war. 

Your  committee  could  extend  this  part  of  the  report  in  relation  to  the 
canal,  almost  without  limit,  but  deem  it  unnecessary  on  the  present  occa- 
sion, believing  as  they  do,  that  the  importance  of  this  part  of  the  subject 
referred  to  them,  must  address  itself  to  the  serious  consideration  and  atten- 
tion, not  only  of  this  House,  but  to  the  people  of  the  State  and  the  Nation. 


. 


• 

• 

• 
. 

.  •     . 

' 
• 


ILLINOIS)  H.  R,  (12th  Ass  KM. 

LEGIS.  >  (  2d  SESSION. 


FEBRUARY  22,  1841. 
Read  and  laid  on  the  table. 


MINORITY     REPORT 


SELECT    COMMITTEE 


. 

TO   WHOM    WAS    REFERRED 

. 

THE  SUBJECT  OF  THE   DISPOSITION  OF  THE  INTERNAL    IMPROVEMENT    SYSTEM, 

THE  CANAL,    AND  THE    RAISING  AN  ADEQUATE  REVENUE  FOR    THE 

SUPPORT    OF   THE  STATE    GOVERNMENT. 

• 




The  undersigned  dissenting  from  the  majority  of  the  select  committee 
to  whom  was  referred,  the  subject  of  the  disposition  of  the  internal 
improvement  system,  the  canal,  and  the  raising  an  adequate  revenue- 
for  the  support  of  the  State  government  and  maintenance  of  the  pub- 
lic faith,  begs  leave  respectfully  to 

REPORT: 

That  while  the  undersigned  fully  concurs  with  the  majority  in  the 
magnitude  and  importance  of  the  subjects  referred  to  the  committee, 
and  the  paramount  influences  they  must  exercise  on  the  destinies  of  Illi- 
nois, whatever  may  be  the  disposition  made  of  them.  And  while  he 
cheerfully  concedes  to  them  the  same  measure  of  sincerity  and  honesty 
of  purpose,  which  he  claims  for  himself;  and  while  he  would  further 
award  to  them  that  high  character  for  talent  and  patriotism,  which  some 
of  them  have  earned  by  many  years  of  faithful  public  service,  and  of 
which  all  give  promise.  Yet  the  subscriber  cannot  injustice  to  himself, 
his  constituents  and  the  State  shrink  from  the  performance  of  what  he 
believes  an  imperious  duty  in  setting  forth  as  he  now  does  ,  the  reasons 
for  his  dissent.  It  is  a  subject  of  no  surprise  that  on  subjects  so  deeply 
interesting  to  the  welfare  of  Illinois,  that  there  should  be  a  difference  of 
opinion,  but  it  is  a  source  of  much  mortification  to  the  undersigned  to  find 
himself  alone  in  the  committee.  Thus  situated  coming  in  collision  with 
the  opinions  of  so  large  a  majority  qt  the  committee,  men  with  whom  he 


2 

has  been  accustomed  to  act,  and  to  men  whose  better  judgments  he  has 
been  accustomed  to  refer.  The  subscriber  at  the  same  time  he  presents 
this  report,  is  led  to  distrust  his  own  judgment  and  is  only  induced  to  do 
so  from  the  responsibility  of  his  station,  representing  as  he  does  a  nu- 
merous and  high  minded  constituency,  whose  interests  are  deeply  in- 
volved in  the  subjects  under  consideration,  he  feels  that  he  may  not  omit 
to  point  out  the  consequences  which  he  believes  will  follow  the  adoption 
of  the  plans  of  the  majority.  In  commenting  on  their  plans  the  under- 
signed will  endeavor  to  treat  their  opinions  with  respect,  but  he  will  ask 
their  indulgence  if  he  does  so  with  plainness. 

The  subscriber,  believing  as  he  does  that  he  will  not  have  discharged 
his  duty  to  those  whose,  interests  he  represents  here  by  clearly  pointing 
out  what  he  conceives  to  be  the  error  in  the  policy  recommended  by  the 
majority,  but  that  common  justice  requires  that  while  he  calls  in  ques- 
tion the  wisdom  or  prudence  of  the  measure  suggested  by  others,  he 
should  offer  to  the  consideration  of  the  House,  some  plan  in  lieu  thereof. 
This  duty  the  undersigned' will  attempt  to  perform,  and  to  do  this  he 
may  have  to  travel  apparently  out  of  the  strict  requirements  of  the  res- 
olution— and  take  a  slight  survey  of  our  public  expenditures  and  such 
subjects  of  State  policy  as  are  intimately  connected  with,  and  which  ma- 
terially affect  our  finances.  The  un  lersigned  will  have' to  ask  the  indul- 
gence of  the  House  if  his  remarks  should  seem  to  be  lengthy,  the  inter- 
ests involved  are  of  so  vast  and  multiplied  a  character  he  cannot  com- 
press within  very  narrow  limits  his  objections  to  the  plans  proposed, 
and  submit  others  which  in  his  judgment  promise  better  results. 

The  undersigned  is  fully  aware  of  the  obligation  resting  on  this  Legis- 
lature, not  only  to  provide  for  the  maintenance  of  the  government  for 
the  next  two  years,  and  provide  means  if  practicable  to  carry  out  the 
canal  to  completion,  but  she  is  imperiously  called  upon  to  provide  a  rev- 
enue for  the  payment  of  interest  on  our  public  debt.  It  is  known  that 
our  credit  and  character  abroad  has  already  suffered,  and  the  question 
now  arises  shall  this  Legislature  adjourn  without  having  made  some  per- 
manent provision  to  meet  our  engagements,  and  sustain  the  faith  and 
character  of  the  State,  as  far  as  may  be  in  its  power,  or  whether  we 
shall  go  Home  after  so  protracted  a  session  without  having  done  any  thing 
to  sustain  our  fast  sinking  credit  abroad,  or  to  relieve  the  anxieties  or  a- 
meliorate  the  suffering  condition  of  our  citizens  at  home. 

Public  honor  and  public  faithshould-.be  inviolate,  and'on  this  Legisla- 
ture rests  the  solemn  responsibility  of  providing  to  main.tain  it,  or  we 
shall  be  placed  before  our  sister  States,  and  the  civilized  world  in  the  hu- 
miliating position  of  being  the  first  American  State,  who  will  have  disre- 
garded our  plighted  faith,  and  set  at  defiance  public  opinion,  by  shrinking 
from1  our  duties,  arid  refusing  or  neglecting  to  do  what  yet  remains  in  our 
power  towards  restoring  confidence  abroad  in  lthe'rnt'egrity,  and  in  the 
ultimate  ability  of  the  State  to  meet  her  engagements. 

Before  proceeding  to  suggest  any  remedies  for  existing  evils,  or  a  plah 
of  escape  from  them,  it  many  be  necessary  to  take  a  brief  survey  of  the 
past  to  ascertain  the  causes  of  our  present  embarrassments.  The  amount 
of  our  indebtedness,  and  the  resources  we1  have  left  us  to  aid  in  meeting 
our  present  and  future  liabilities.  I  am  aware  itis  a  thankless  office  t'o 
review  past  Legislation1  and  point  out  its  errors,  but  it  may  be  ' 


3 

ry  to  do  it.  From  a  mistaken  sense  of  duty,  or  from  the  belief  that  the 
people  of  Illinois  would  not  pay  an  amount  of  taxation  equal  to  her  just 
expenses,  we  have  incurred  a  debt  to  defray  the  ordinary  expenses  of 
the  State  Government  of  one  halfa  million  of  dollars,  and  under  such 
circumstances  did  the  Legislature  commence  our  gigantic  system  of  in- 
ternal improvement.  At  this  time  common  prudence  and  a  just  regard 
to  the  rights  of  the  public  creditors  as  well  as  the  honor  and  character 
of  the  State,  and  a  safe  guaranty  for  the  prosecution  of  the  works  to 
completion,  all  imperiously  demanded,  that  a  permanent  and  efficient  rev- 
enue should  be  raised,  not  only  sufficient  to  pay  current  expenses,  but  to 
provide  for  the  payment  of  interest  on  the  loans  contemplated  to  carry  on 
the  public  works.  For,  aside  from  the  impolicy  of  borrowing  money  to 
pay  interest  on  large  sums,  thereby  increasing  the  debt  by  the  rapid  pro- 
cess of  compound  interest,  a  system  of  financiering  ruinous  to  private  in- 
dividuals or  to  communities,  such  a  revenue  was  called  for  as  a  basis  on 
which  to  sustain  the  credit  of  the  State.  For  capitalists  will  only  lend 
money  where  ample  security  is  tendered  for  the  payment  of  interest  at 
least  on  monies  borrowed. 

-  But  the  levying  a  heavy  tax  at  the  commencement  of  the  system  was 
loudly  demanded  by  every  consideration  of  prudence  and  public  policy, 
for  as  the  necessity  for  such  increase  of  taxation  must  have  been  obvious 
to  any  mind  at  all  conversant  with  questions  of  finance,  what  time  so 
propitious  for  the  Legislature  to  have  performed  a  duty  at  all  times  so 
onerous  as  that  of  levying  taxes.  From  the  large  increase  of  banking 
capital,  and  the  consequent  expansion  of  the  currency,  and  the  addi- 
tional amount  also  thrown  into  circulation  by  the  operations  of 
the  various  public  works  in  progress,  and  the  popular  feeling  at  that  lime 
in  favor  of  the  system,  all  combined  to  mark  this,  as  the  time  most  aus- 
picious for  raising  a  revenue  suitable  to  the  public  exigencies.  But  that 
time  was  permitted  to  pass.  The  internal  improvement  system  original- 
ly wild  and  extravagant  in  the  extent  which  it  was  contemplated  to  be 
carried,  want  of  prudence  and  economy  in  its  management,  and  a  grow- 
ing conviction  in  the  public  mind  that  many  at  least  of  the  contemplated 
works  were  uncalled  for  by  the  public  necessities,  or  would  fail  to  pay  a 
revenue  if  completed.  The  system  having  received  the  sentence  of  con- 
demnation as  expressed  by  public  opinion;  money  from  being  very  a- 
bundant  has  become  unusually  scarce,  the  bank  being  compelled  to  with- 
draw a  large  amount  of  its  circulation;  at  the  same  time  the  public  works 
were  stopped,  and  all  supplies  stopped  from  this  source;  thousands  of 
hands  thrown  out  of  employment;  the  merchants  and  the  community 
who  had  become  largely  indebted  in  times  of  apparent  prosperity  greatly 
suffering;  the  State  stocks  from  being  at  par  having  rapidly  depreciated, 
so  that  they  arc  only  worth  from  65  to  70  cents  on  the  dollar,  and  still 
have  a  tendency  downward;  our  internal  improvement  system  (so 
called)  abandoned,  yet  called  upon  to  furnish  supplies  for  the  pros- 
ecution of  the  canal,  requiring  during  the  present  year  at  least  fif- 
teen hundred  thousand  dollars;  a  large  amount  of  State  bonds  pledged, 
which  are  already  subject  to  sacrifice,  and  if  it  h  is  not  already  taken 
place  it  has  been  from  the  forbearance  of  the  holders  of  them, 
another  still  larger  amount,  which  will  in  about  thirty  days  be  subject  to 
B2 


[402]  4 

forfeiture;  upwards  of  $1,300,000  out  in  scrip  now  due,  and  many  who 
have  honestly  labored  for  it  arc  nearly  ruined  for  want  of  payment — • 
over  §40D,000  of  interest  to  be  provided  for — our  State  Bank  again  in  a 
State  of  suspension,  her  resources  very  much  crippled  and  utterly  una- 
ble in  her  present  position  to  extend  any  efficient  aid  in  relieving  the  ne- 
cessities of  the  peopb  or  of  the  State;  Auditor's  warrants  as  well  as  every 
other  evidence  of  State  securities  "25  to  30  per  cent,  below  par;  not  one 
dollar  in  your  treasury,  and  within  one  week  of  the  expiration  of  the  ses- 
sion. At  such  a  time  it  is  that  we  are  called  upon  to  devise  ways  and 
means  to  extricate  the  State  from  her  embarrassments,  relieve  the  wants 
of  the  people,  and  provide  for  the  reinstation  of  public  confidence  and 
credit. 

The  undersigned,  in  view  of  our  present  condition  ana  future  prospects, 
as  one  of  the  committee,  distrusting  his  own  judgment,  and  the  more  so 
from  his  difference  of  opinion  from  most  of  his  friends,  and  his  acknowl- 
edged want  of  experience  in  extensive  financial  operations,  he  would 
most  willingly  avoid  the  responsibility  of  suggesting  a  course  of  policy 
to  be  pursued  in  the  present  disastrous  situation  of  our  affairs.  But  he 
will  shrink  from  no  duty  that  his  constituents,  or  the  State  may  seem  to 
require  at  his  hands,  but  will  freely  and  fearlessly  express  his  opinions,  and 
suggest  such  plans  as  his  judgment  approves  of,  trusting  the  House  will 
excuse  the  frankness  assumed,  and  give  to  his  suggestions  whatever  con- 
sideration they  may  merit.  The  undersigned  would  recommend  then, 
first,  a  more  rigid  economy  incur  public  expenditure,  and  a  more  strict 
accountability  in  our  public  affairs  and  agents.  2d,  The  repeal  of  the 
entire  Rail  road  system  and  the  letting  the  works  to  companies  as  far  as 
they  may  be  disposed  to  take  them.  3d,  The  suspension  of  all  operations 
on  the  canal  until  our  State  credit  shall  have  been  placed  on  so  firm  a 
basis  that  we  may  with  confidence  hope  to  borrow  money  for  its  comple- 
tion without  doing  so  at  ruinous  sacrifices.  4th,  To  provide  for  raising 
such  a  revenue  as  will  inspire  confidence  at  home  and  abroad,  that  we  are 
determined  to  meet  our  cng?gements  and  provide  the  means  of  paying 
every  honest  demand  that  may  be  against  us. 

The  undersigned  will  have  to  ask  the  indulgence  of  the  House,  while  he 
offers  some  of  the  reasons  that  impel  him  to  make  the  recommendation 
he  has  done,  and  particularly  in  relation  to  the  canal,  as  his  opinions  arc 
at  Aariance  with  the  recent  expressed  opinions  of  the  House  on  this  sub- 
ject, and  it  may  appear  a  want  of  decorum  in  him  to  urge  a  measure  on 
the  House  it  has  so  recently  decided  as  inexpedient. 

And  first  the  necessity  of  strict  economy  and  accountability  in  ihe  man- 
agement of  our  affairs  must  be  apparent,  while  we  should  avoid  a  mean 
parsimony  in  providing  for  our  officers;  we  should  avoid  any  appearance; of 
extravagance,  in  times  of  such  great  pecuniary  embarrassment,  and  while 
it  is  necessary  to  greatly  increase  the  burthens  of  the  tax  paying  commu- 
nity ,  common  justice  requires  that  the  sums  thus  raised  from  the  hard  earn- 
ings of  the  community  should  be  husbanded  carefully,  and  above  all  every 
dollar  should  be  accounted  for.  It  has  been  the  unpleasant  duty  of  tho 
undersigned  this  winter,  as  chairman  of  a  committee  of  this  House  to  ex- 
amine extensive  accounts  and  expenditure?,  and  the  conviction  has  been 
fixed  in  his  mind,  that  this  branch  of  the  public  service  is  susceptible  of 


^  5  [403] 

great  improvement.  This  course  is  rendered  necessary  not  only  to  si- 
lence well  founded  complaints  at  home,  but  to  inspire  confidence 
abroad;  for  without  strict  accountability,  a  large  revenue  may  be 
wasted,  the  people  oppressed,  and  yet  the  just  claims  of  the  pub- 
lic creditors  go  unsatisfied.  It  is  the  deliberate  opinion  of  the  under- 
signed, that  in  almost  every  department  of  the  public  service  a  large  re- 
duction in  our  expenditures  might  take  place  without  any  detriment  to 
the  public  service,  and  would  render  our  constituents  more  willing  to  bear 
any  burthens  we  might  impose  on  them  by  sacrificing  some  portion  of 
the  claims  we  may  be  supposed  to  have  on  the  treasury. 

The  repeal  of  the  Railroad  system;  on  this  subject  the  undersigned  has 
heretofore  expressed  his  views  which  may  be  found  in  a  minority  report 
submitted  some  time  since,  and  he  will  only  add,  that  as  Legislators  we 
should  respect  public  opinion,  and  this  opinion  he  cannot  doubt  but 
calls  for  its  repeal;  and  he  is  further  constrained  to  say,  tb*ff>?o  far  as  he 
is  made  acquainted  with  their  feelings  on  this  subject  theV  will  very  un- 
willingly submit  to  further  taxation  while  this  law  remains  on  your 
statute  books.  Believing  as  they  do  that  it  is  there  retained  with  the  view 
of  further  prosecuting  the  system  at  some  future  period,  an  event  which 
they  would  regard  as  most  destructive  of  the  public  interests,  and  would 
cut  off  all  hope  at  ever  seeing  our  State  relieved  from  her  embarrass- 
ments. If  companies  will  take  and  finish  them  on  fair  terms,  we  should 
1st  them  do  it;  if  not,  a  large  share  of  them  should  be  abandoned  before  a 
further  waste  of  our  resources  is  made  in  so  hopeless  a  project. 

In  regard  to  the  canal,  the  undersigned  is  anxious  to  be  distinctly  un- 
derstood; he  would  fain  hope  to  convince  the  friends  of  the  canal,  that 
the  bests  interests  of  that  Work  itself  calls  for  suspension,  and  he.  will 
here  take  occasion  to  suy,  that  he  desires  and  expects  to  see  that  work 
finished,  and  has  no  doubt?  but  it  will  be  unless  its  prospects  are  blasted 
by  those  who  profess  to  be  its  friends,  by  throwing  the  shade  of  sus- 
picion around  the  character  and  conduct  of  those  who  have  the  manage- 
ment of  it,  by  making  or  endeavoring  to  make  it  subservient  to  party 
purposes,  and  by  pressing  for  the  sale  of  bonds  at  their  present  depreciated 
prices,  and  as  a  necessary  consequence  still  further  reducing  them  in 
value  in  market,  when  if  such  depression  cannot  be  prevented  and  their 
value  enhanced,  all  hope  of  completing  this  work  must  be  abandoned. 

This  work  was  carried  on  last  year  by  a  transfer  by  the  Governor  of 
bonds  to  the  contractors  at  par,  and  by  them  sold  in  London  at  17  per 
cent,  discount.  Our  internal  improvement  bonds  had  been  worth  from 
90  to  91,  and  had  never  been  sold  by  the  agents  of  the  Stale  for  less,  and 
these  bonds  have  always  been  considered  less  valuable  than  canal  bonds, 
as  being  not  so  well  secured.  The  value  of  our  bonds  in  the  London 
market,  were  of  course  all  depressed  to  that  price,  this  being  the  best 
description  of  bonds  we  have.  This  together  with  other  injudicious  sales 
and  hypothecation  of  bonds  at  home  and  abroad,  and  the  fact  that  the 
State  has  provided  no  permanent  fund  for  the  payment  of  interest,  and 
a  pressure  in  the  money  market  all  conspired  to  sink  the  value  of  our 
bonds  until  they  are  barely  worth  70  cents  in  the  dollar;  and  this  depres- 
sion must  continue  with  accelerated  force  unless  the  Legislature  shal 
raise  a  permanent  revenue,  and  all  apprehension  be  removed  is  to  the 
egular  payment  of  interest,  for  however  solvent  the  State  may  be  tbe- 


[404]  6 

lieved  to  be  if  she  permits  her  interest  to  go  unpaid,  our  bonds  will  be 
thrown  out  of  market  as  of  no  value.  It  is  proposed  again  to  pay 
contractors  bonds  in  payment  for  their  work.  These  the  contractors 
must  dispose  of,  as  they  are  unable  to  carry  on  their  contracts  and  retain 
the  bonds.  Our  bonds  abroad  being  now  worth  only  70  per  cent.,  and 
every  cause  operating  since  the  last  advices  to  produce  a  still  further  de- 
decline;  any  new  emissions  of  bonds  without  some  proper  guaranty  for 
the  payment  of  interest  must  beget  still  greater  distrust,  and  any  sale 
made  of  their,  must  be  at  prices  below  70  per  cent.,  and  produce  a  still 
greater  depression  in  the  prices  of  all  our  stocks.  Let  it  be  borne  in  mind 
that  if  the  cinal  goes  on  these  bonds  must  be  sold,  at  whatever  sacrifice, 
and  if  this  course  is  permitted  your  bonds  will  be  depressed  to  half  price. 
Can  any  reflecting  mind  at  all  conversant  with  financial  affairs  doubt  thai: 
this  must  be  the  result;  all  the  laws  of  trade,  and  the  continued  if  not  in- 
creased pressure  on  the  money  market  point  to  this  as  the  inevitable  re- 
sult of  putting  in  market  so  large  an  addition  of  bonds,  when  stocks  of 
every  kind  are  so  depressed,  and  Illinois  bonds  peculiarly  so,  and  when 
our  banks  east  and  west  are  in  a  state  of  suspension.  But  it  may  be  ob- 
jected that  the  loss,  if  any,  will  be  sustained  by  the  contractors.  Suppose 
it  granted  that  for  the  present  year,  it  is  so?  What  will  be  our  condition 
next  year  to  continue  the  work,  if  our  bonds  are  by  this  process  of 
shoving  them  into  market  this  year,  sunk  to  half  price?  A  similar  operation 
must  be  gone  into  next  year,  and  a  further  decline  takes  place,  or  sup- 
pose them  to  remain  stationary?  Have  our  contractors  got  their  con- 
tracts at  such  prices,  that  they  can  lose  one  half  their  pay  in  the  opera- 
tion of  shaving,  and  sdll  sustain  themselves?  If  they  can,  then  the  n  •- 
ture  of  their  contracts  well  merits  enquiry.  But  again  a  very  considerable 
portion  of  these  works  have  not  yet  been  let,  and  before  the  works  now 
in  progress  can  avail  the  State  any  thing,  these  must  also  be  finished. 
Will  this  Legislature  permit  new  jobs  ro  be  let,  and  give  bonds  in  pay- 
ment, those  bonds  being  worth  only  half  price  in  market,  and  which  the 
State  must  redeem  at  their  face?  Will  not  the  new  contracts  be  taken  at 
prices  proportionate  to  the  reduced  value  of  the  bonds?  On  the  whole,  I 
am  constrained  to  believe  that  if  this  system  is  pursued,  your  works  must 
stop  twelve  months  hence,  without  some  extraordinary  aid  coming  to  our 
relief,  which  is  a  contingency  too  remote  on  which  to  rely  for  Legislative 
action,  and  on  interests  so  important.  Would  it  not  be  better,  and  the 
undersigned  would  address  himself  to  the  friends  of  the  canal,  that  it 
should  be  s  spended  during  the  present  year;  that  in  the  mean  time  we 
should  raise  a  revenue,  collect  our  resources,  and  elevate  the  character 
of  the  State  by  a  rigid  compliance  with  her  contracts  abroad;  by  so  doing 
we  might  next  season  borrow  the  money  on  fair  terms,  and  even  without 
other  aid,  we  would  have  a  fair  prospect  of  carrying  on  this  work  to  com- 
pletion; or  shall  we  persist,  our  bonds  be  still  further  depressed  in  market, 
our  citizens  still  further  embittered  against  all  public  improvements,  by 
having  State  bonds  sacrificed,  which  their  farms  will  be  mortgaged  to  pay, 
and  our  creditand  standing  abroad  irretrievab'y  ruined. 

But  it  may  be  objected  in  regard  to  the  new  contracts,  that  there  is  no 
danger  of  having  to  pay  exhorbitant  prices  for  their  completion,  even  if 
the  State  stock  should  become  still  further  depressed,  as  the  same  con- 
tractors propose  taking  them  at  the  estimates  of  Engineers,  and  that  the 


same  bill  provides  for  incorporating  a  company  and  giving  to  them  the 
contracts  on  these  terms.  In  the  opinion  of  the  undersigned,  this  is  not 
the  least  exceptionable  part  of  the  bill.  By  the  incorporation  of  a  com- 
pany and  assigning  them  the  work  at  a  given  price,  and  stipulating  for 
the  payment  of  the  works  in  State  bonds  at  par,  the  very  acceptance 
of  the  contracts  with  such  stipulations  shows  the  prices  of  the  work  to 
be  put  unreasonably  high,  or  the  corporation  would  not  take  the  contract 
and  receive  bonds  at  par  in  payment,  when  these  bonds  are  at  thirty  to 
thirty-five  per  cent,  discount,  and  still  falling,  unless  the  prices  they  ob- 
tained were  at  unreasonable  rates.  Again,  these  estimates  were  made 
some  years  since,  when  labor  on  the  canal  was  20  to  30  dollars  permonth, 
when  it  can  now  be  obtained  at  10  to  12  dollars,  showing  most  conclusive- 
ly that  they  are  made  much  too  high  with  reference  to  the  present  prices. 
There  can  be  very  little  doubt  that  for  cash  payment  these  jobs  would 
now  be  taken  at  hall  price  or  less,  consequently  being  a  loss  to  the  State 
of  one  half  the  cost  of  their  construction.  And  it  is  a  subject  that  well 
merits  the  serious  enquiries  of  the  Legislature,  whether  they  will  give  to 
a  chartered  corporation  all  the  contracts  without  permitting  others  te  be- 
come bidders,  thus  closing  the  doors  to  all  competition.  Such  a  course  is 
alike  destructive  of  the  interests  of  the  State  and  other  citizens,  who 
may  wish  to  compete  for  these  jobs,  and  who  perhaps  possess  equal,  if 
not  superior  qualifications  to  prosecute  them  to  advantage. 

A  revenue;  the  undersigned  came  to  this  place  prepared  to  support  any 
system  of  taxation  that  our  citizens  could  bear,  and  which  the  preserva- 
tion of  the  honor  and  faith  of  the  State  might  demand.  But  this  deter- 
mination was  based  on  the  supposition  that  our  Legislation  should  be 
founded  on  principles  which  had  the  sanctionof  his  judgment  and  such 
as  he  believed  his  constituents  would  approve.  Our  commencement  by 
the  hypothecation  of  bonds  was  regarded  as  most  calamitous,  and  he  will 
be  happy  to  find  his  fears  were  not  well  founded.  We  should  look  at  our 
affairs  if  possible,  with  the  eyes  of  statesmen,  resolved  to  find  our  true 
situation.  These  remedies  are  necessary,  and  if  within  our  reach,  ap- 
ply them.  The  undersigned  is  still  the  advocate  of  efficient  taxation,  but 
it  must  come  accompanied  with  measures  which  promise  that  the  sums  so 
raised  from  our  common  constituents  shall  not  be  lost  in  the  sacrifice  of 
State  bonds.  It  must  be  under  circumstances  that  furnishes  ground  ofhope 
that  our  tarnished  honor  may  be  cleared  of  imputation,  and  that  while 
we  provide  for  the  payment  of  our  foreign  debt,  we  do  not  lose  sight  of 
our  suffering  citizens  at  home.  Shall  we  not  pause?  Shall  we  not  look 
around  us  and  calmly  calculate  on  consequences?  Our  affairs  are  yet  sus- 
ceptible of  being  reinstated.  The  gloom  that  pervades  every  countenance 
when  our  State  affairs  arc  mentioned,  may  be  dissipated,  and  our  State 
occupy  that  proud  position  that  with  prudent  councils  she  is  destined  to 
fill.  Should  the  House  determine  to  suspend  operations  on  the  canal  and 
prevent  the  hypothecation  of  any  more  State  bonds,  unless  on  long  time 
and  to  redeem  bonds  that  would  otherwise  be  sacrificed,  the  under- 
signed will  be  found  lendinghisaid  in  creating  a  revenue;  but  unless  such 
should  be  the  case,  every  consideration  of  duty  to  himself  and  his  constit- 
uents forbid  the  idea  as  only  tending  to  oppress  them,  without  in  the 
smallest  degree  advancing  their  permanent  interests,  but  the  money  so 
wrung  from  them  will  go  to  fill  the  pockets  of  brokers  and  stock-jobbers. 


[406]  8 

The  committee  recommend  the  issuing  three  millions  in  State   bonds, 
bearing  interest  at  the  rate  of  seven  per  cent,  to  carry  on  the  canal,  subject 
to  the  direction  of  the  contractors  to  be  either  sold  or  pledged  on  such 
terms  as  they  may  direct.     They  further  propose  to  issue  any   amount  of 
bonds  that  may  be  necessary,  to  be  called  interest  bonds,  which  also  bear 
seven  per  cent,  interest,  and  be  sold  for  the  best  price  that  can  be  got  for 
them.     Here  are  two  classes  of  bonds  to  be  thrown  into  market  and  by  dif- 
ferent owners,  the  rate  of  interest  to  be  higher  than  ever   before  contem- 
plated for  State  bonds,  and  the  necessities  of  each  so  great  that  they  must  be 
sold  at  whatever  price  the  avarice  or  cupidity  of  foreign  Shy  locks  may 
please  to  give  for  them,  and  these  different  holders  each  underbidding  each 
other.     They  (the  stock-jobbers)  may  at  first  be  satisfied  with  the  pound  of 
flesh,  but  with  the  growing  necessities  of  the  contractors    and  the  State, 
will  the  demandsof  avarice  keep  pace,  and  the  suffering  victims  must  sub- 
mit   to  deeper  and  still  deeper  shaving.     Will  the  Legislature  of  Illinois 
thus    legalize    shaving,    on  a     wholesale   scale,  themselves     being  the 
victims  to  be  operated  upon.     Will  that  Legislature  which  was  so  recent- 
ly edified  by  so  pathetic  a  disquisition  on  the  evils  and  corrupting  tenden- 
cy of  banking,  so  soon  forget  the  lessons  of  prudence  so  freely  tendered, 
and  offer  her  bonds,  and  with   them    her  honor  and  character  to  foreign 
brokers  and  money  changers,  and  tell  them  to  take  them  and    give   what 
they  please  in  return?     is  there  any  thing  in  being  swindled  by  a  foreigner 
which  makes  it  grateful  to  a  Sucker  bosom?  Will  our  constituents  think  all  is 
right  in  sacrificing  millions  to  foreign  bankers,  and  yet  our  own  institutions 
must  be  visited  by  our  utmost  vengeance,  if  they  resort  to  r ommon  pru- 
dence to  protect  themselves?     I  would  invoke  the  attention   of  the  House 
to  the  proposed  plans.  To  my  vision,  ruin  is  stamped  on  their  every  line.  If 
swindling  does  not  follow  in  its  train,  and  if  further  and  deeper  disgrace  does 
not  close  the  scene,  then  may  we  expect  "sweet  streams  to  flow  from  bitter 
fountains,"  and  the  events  to  belie  what  the  plans  hold  out.      To  me  the 
pro3pect  seems  so  utterly  devoid  of  promise  thatdid  I  not  know  from  whence 
they  originated  I  should  pronounce  it  a  hoax.     I  will  only  say  that  looking 
at  the  depressed  state  of  monetary  affairs,  the  low  situation  of  our  credit, 
and  the  tendency  of  these  measures  to  ruin  our  credit  if  now  good,  the  induce- 
ments held  out  to  shaving,  and  its  inevitable  following,  two  years  will  not 
have  closed,  until  you  will  have  ruined  contractors — an  unfinished  canal, 
three  millions  gone,  and  will  need  the  aid  of  a  public  administrator  to  set- 
tle up  the  affairs  of  a  defunct  canal;  for,  after  the  waste  that   must   follow 
so  improvident  a  course  no  one  will  be  hardy  enough  to  ask  lor  another  ap- 
propriation. 

The  committee  recommend  the  authorizing  of  the  bank  to  suspend  during 
the  period  while  the  western  banks  shall  do  so.  To  this  measure  the  un- 
dersigned could  agree,  if  such  suspension  was  the  act  of  a  large  majority 
of  both  parties  in  the  Legislature,  but  from  the  vote  recently  taken  in  the 
House  on  that  subject,  it  is  obvious  that  if  such  a  measure  passes  it  must 
be  by  a  meagre  majority.  That  institution  is  already  hard  pressed  by  the 
payment  of  specie,  when  the  vaults  of  the  other  banks  were  closed,  and 
she  is  in  so  crippled  a  condition,  that  without  the  countenance  of  the  State 
authorities,  and  cherished  by  them  instead  of  being  the  subject  of  invidious 
attacks,  she  can  render  the  State  or  her  citizens  but  little  service;  and  if 
the  same  course  is  taken  with  her  that  has  been  heretofore,  like  a  consump- 


9  [407] 

live  patient  she  may  linger  along  with  a  feeble  existence,  but  her  onward 
course  must  be  faltering  until  she  foils  to  rise  no  more.  The  undersigned 
regrets  the  prospect  of  seeing  her  go  down,  money  is  now  scarce  and  is 
daily  becoming  more  so,  and  her  paper  constitutes  a  large  share  of  our  cir- 
culating medium,  besides  she  has  a  large  amount  of  debts  oweing  her  by 
our  citizens,  the  payment  of  which  at  the  present  juncture  must  greatly 
distress  thorn.  But  her  business  is  so  cramped  that  she  now  makes  no  profit 
for  the  State,  or  her  other  stockholders,  and  satisfied  as  1  am  that  without  a 
total  change  of  policy  in  regard  to  her  she  must  fail,  and  I  feel  unwilling 
to  assist  in  prolonging  a  feeble  existence. 

In  conclusion,  the  undersigned  wo.ild  ask  the  House,  that  burthened 
with  a  debt  of  nearly  fourteen  millions,  the  annual  interest  on  which  ex- 
ceeds seven  hundred  thousand  dollars;  a  prostrate  bank;  four  hundred 
thousand  dollars  of  your  bonds  already  pledged  at  one-third  of  their  face, 
part  of  which  are  now  forfeited,  and  the  balance  shortly  will  be;  up- 
wards of  six  hundred  thousand  dollars  more  lost  or  in  imminent  danger  in 
New  York  by  the  bad  management  of  your  agents;  between  one  and 
two  millions  in  Europe  in  a  like  condition.  Your  interest  falling  due  be- 
fore the  Legislature  meets  again  unprovided  for,  and  an  extra  session  of 
the  Legislature  in  consequence  almost  inevitable;  your  bonds  selling  at 
60  to  70  cents  on  the  dollar;  a  bankrupt  treasury,  and  an  oppressed  and 
dispirited  people;  thousands  of  your  honest  citizens  who  have  labored 
on  your  public  works  are  already  nearly  or  quite  ruined  by  withholding 
from  them  their  just  demands;  the  State  so  poor  she  cannot  pay 
her  door-keepers  much  less  her  members;  under  such  circumstances  is  it 
that  we  are  called  upon  to  authorize  the  emission  of  three  millions 
more  in  bonds  to  be  hawked  about  America  and  Europe.  Your  commis- 
sioners knocking  at  the  door  of  every  pawn-broker  andshaver,  begging 
them  to  buy  or  lend  money  on  bonds,  Illinois  bonds. 

The  undersigned  appeals  to  members  to  look  at  this  picture,  its  shades 
are  dark,  but  truth  would  warrant  in  giving  a  still  darker  hue.  The  un- 
dersigned would  again  appeal  to  members;  he  would  ask  them  in  solemn 
sadness  to  examine,  closely  examine  the  majority  proposition.  Let  us 
not  be  induced  by  any  committee  however  talented  or  respectable  to  take 
on  trial  measures  so  portentous,  measures  so  fraught  with  evil,  if 
evil  it  be.  Are  we  prepared  to  take  another  plunge?  Are  we  pre- 
pared to  go  home  and  tell  our  constituents,  we  have  mortgaged 
their  farms  for  three  millions  more?  Are  we  prepared  to  say  to  them, 
we  have  doubled  their  taxes,  but  we  have  provided  no  means  to  pay  such 
of  you  as  have  faithfully  labored  on  our  public  works?  Shall  we  say  to 
them,  that  while  we  have  increased  their  debts  and  added  to  their  bur- 
thens, we  have  failed  to  lessen  the  public  expenditure,  but  have  increased 
it?  These  arc  grave  questions,  but  questions  we  must  expect  to  answer, 
if  the  proposed  measures  are  carried  out.  The  undersigned  would  not 
weary  the  House,  but  he  feels  that  if  these  measures  become  laws  you 
have  given  the  last  stab  to  the  credit  of  Illinois.  No  more  may  we  hope 
for  repose  at  home,  or  honor  or  character  abroad.  Your  State,  your 
credit,  your  prospects  are  blighted.  The  erect  and  manly  forms  of  the 
freemen  of  Illinois,  will  become  bent,  their  spirits  broken  by  the  hopeless 
prospect  of  interminable  bankruptcy.  In  the  name  of  his  constituents, 
the  undersigned  must  protest  against  a  policy  so  ruinous,  and  although  we 


[408J  10 

must  suffer  in  the  common  calamity,  we  will  at  least  find  some  consola- 
tion in  the  reflection,  that  we  have  done  all  that  we  could  to  avert  the 
ruin  with  which  we  shall  be  surrounded. 

I  will  close  this  painful  report,  by  presenting  to  the  House  a  bill  for 
their  acceptance  or  rejection;  in  the  choice  of  this  and  those  proposed  by 
the  majority  of  the  committee,  will  in  the  opinion  of  the  undersigned  de- 
pend much  of  weal  or  woe  to  the  people  of  Illinois. 

LEANDER  MUNSELL. 


